Tradesmen like mechanics, machine operators, welders or labourers receive form W-2, wage and tax statement from their employers. If these tradesmen provide services apart from their regular job, the payment received is considered as income from self-employment and should be reported. Those who are self-employed and earning more than 400$ are required to pay self-employment tax.
If you have job-related expenses regarding to your self-employment you can deduct it and lower down the tax you pay. Receipts are required to prove these expenses. Need help with claiming a tax rebate? Contact Tax Rebate Services for professional tax and accounting services. Their experts help with acquiring mechanics tax refund. Before applying for refunds learn about the list of expenses that are deductible.
Being a mechanic, you are required to carry your own tools to work. The amount spent on buying equipment like machinery, tools and supplies that are involved in carrying out your work. The items include tool sets with screwdrivers, bolts, screws, joint and bars, backpacks, electronic organizers, belt bags are deductible. In case, you use your backpack 40% of the time for work and remaining 60% of time for personal use, only 40% can be deducted.
Clothing and protective gear:
The clothes you buy for work aren’t deductible but the mandatory uniforms you purchase are deductible. To qualify for deduction, you must supply proof that your employer requires you to purchase it. The clothes must be unsuitable for regular use. Only clothes with company logo are considered for deduction. Even if your employer requests you to wear generic black shirt and pants, they aren’t deducted.
If a mechanic undertakes training to hone his skills, the expenses involved in training such as cost of books, materials and registration can be deducted. If you are staying somewhere overnight for training, the accommodation expenses and half of your meal’s expenses are deducted. Any work-related seminars or educational courses qualify for deduction. Education that provides training for a new trade or business cannot be deducted. It is not possible for an electric to deduce the amount spent in registering in a contractor school.
Job hunting expenses:
If you are temporarily out of job, you can deduct the expenses involved in job-hunting. Holding odd jobs doesn’t affect your eligibility to qualify for deduction. If a plumber works as a pipe fitter temporarily can deduct his job-hunting expenses.
Other possible expenses:
Self-employed mechanics can deduct their ordinary and necessary costs involved in doing business. The common expenses include:
- Travel expense to visit clients. Travelling to work from home cannot be considered as work-related travel.
- Work-related subscription trade journals
- Dues of trade associations
- Insurance premium
- State and local taxes
- Office supplies and work supplies
- Property taxes on a space you have rented for work
- Work-related attorney and accountant fees
- Advertising, marketing and website expense
- Business bad debts
Save receipts all work-related expenses so that they can be used in tax deduction. Get the help of tax specialists to help you out in the process.