Open TurboTax

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

cancel
Showing results for 
Search instead for 
Did you mean: 
feebs1977
New Member

I am currently working on filing 2020 taxes, this is the first time filing business taxes, where do i add the expense for the tools purchased to perform the business?

 
1 Reply

I am currently working on filing 2020 taxes, this is the first time filing business taxes, where do i add the expense for the tools purchased to perform the business?

As per the Canada Revenue Agency (CRA), you can capitalize the cost of tools and claim Capital Cost Allowance (CCA) on it, if:

 

Tools costs $500 or more, use Class 8 with a CCA rate of 20% includes certain property that is not included in another class. Examples are furniture, appliances, and tools costing $500 or more per tool, some fixtures, machinery, outdoor advertising signs, refrigeration equipment, and other equipment you use in the business.

 

Tools costs less than $500, use Class 12 includes property such as tools, medical or dental instruments, and kitchen utensils that cost less than $500 and were acquired on or after May 2, 2006

Most small tools in Class 12 are not subject to the half-year rule. They are fully deductible in the year of purchase. If the tool costs $500 or more, include it in Class 8 with a CCA rate of 20%.

Class 12 tools that are subject to the half-year rule include dies, jigs, patterns, moulds and lasts, as well as the cutting or shaping part of a machine.

 

 

Thank you for choosing TurboTax.