If you work with your hands for a living, whether you are a plumber, electrician, tow-truck operator, landscaper, or contractor. Your tools and equipment aren’t just gear. They keep your business alive. The good news is that most of what you buy to do your job can lower your tax bill.

Below you will find a simple guide on what the IRS usually lets you deduct, how those write offs actually work, and a few mistakes to avoid. Keep in mind that you should speak with a professionally for your specific use case.

What Counts as a Deductible Business Asset?

The rule of thumb for the IRS is if its “ordinary and necessary” for your trade then it is probably deductible.

That means if you bought it to earn income, and not for personal use, then you can usually write it off to lower your taxable income. For example:

• Tools: wrenches, drills, saws, welders, ladders, gauges, compressors, etc.
• Shop equipment: lifts, diagnostic scanners, generators, pressure washers.
• Office equipment: laptops, tablets, printers, and software used for the business.
• Vehicles: work trucks, vans, trailers, even smaller utility vehicles used mostly for business.
• Safety equipment: steel-toe boots, gloves, safety glasses, uniforms with your logo.
• Job-site supplies: hoses, extension cords, toolboxes, scaffolding, small equipment rentals.

Again, if it is necessary for your trade then it is fair game to write off on your taxes.

Writing Off Work Vehicles

Work vehicles are a big one for contractors and small businesses. You can deduct either actual expenses or mileage but not both.

Option 1: Standard mileage rate. For 2025, the standard mileage rate would be 67 cents per business mile. The best way to calculate this is to either use an app or keep a mileage log, a notebook, showing dates, destinations, miles driven, and purpose of the trip.

Option 2: Actual expense method. You deduct fuel, insurance, repairs, maintenance, and depreciation. This works best if you have a dedicated work vehicle (for example a truck with your logo that is never used personally).

If you use one truck for both and personal errands, you can only deduct the business-use percentage.

Section 179 and Bonus Depreciation — The Big Write-Offs

Equipment and larger vehicles normally are deducted slowly over several years. But Section 179 lets you write off the entire cost of qualifying tools and machinery in the year you buy them, as long as you use them more than 50 percent for business purposes.

Example: If you buy a new $4,500 welding machine in July 2025 and you qualify for Section 179, you can deduct the full $4,500 this year instead of spreading it out.

Then there is bonus depreciation, which lets you deduct a large percentage of the cost of new or used assets in the same year. Section 179 is usually claimed first, and bonus depreciation can cover what is left.

These rules change often, and states sometimes have their own versions, so double check before filing or talk with a tax professional.

Small Tools vs. Equipment

A general rule is if it costs under $2,500, you can usually treat it as a “de minimis” expense and just deduct it immediately.

If it is over $2,500, it becomes a capital asset that must be depreciated or expensed under Section 179.

So $60 drill bits would be an expense but the $7,000 zero-turn mower used for a landscaping business would be equipment that can be written off over time or all at once under Section 179.

Record-Keeping Tips (Important! Don’t Skip This)

Good record keeping can make the difference between a clean deduction and an IRS headache.

• Keep every receipt, both paper and digital. If you buy it for your business, keep the receipt no matter what.
• Write short notes on each receipt. For example, “used for roof tear-off jobs — Main St.”
• Always save invoices, financing agreements, mileage logs, and any contracts.
• Financed equipment: you can still deduct the full cost (not just payments) under Section 179 — keep all financing docs.

How It All Adds Up

Final Thoughts

You don’t have to memorize tax code — you just need to keep good records and know what’s deductible. The IRS designed these deductions to help small business owners reinvest in their companies.

If you’re not sure whether something qualifies, keep the receipt anyway and ask during tax season. It’s better to have too much documentation than not enough.

If you want help setting up a record system that tracks all of this automatically, TaxGuard Accounting Solutions can help you stay organized year-round. Book a free call — it’s free to talk.