Checklist of What Rules and Information the IRS Will Be Verifying

Deductions & Expenses - Tools

____ You deducted the cost of tools that you are able to establish as ordinary and necessary to your employment.

____ You did not deduct the cost of tools that have a useful life of more than one year. The cost of such tools must be capitalized and depreciated over their useful lives.

____ You did not deduct the cost of lost or stolen tools that were fully depreciated in prior years.

____ You deducted the cost of tools with a useful life of less than one year which were bought during the tax year and for which you can verify the cost.

____ You deducted the cost of tools only as a miscellaneous deduction subject to the 2% of adjusted gross income limitation.

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