Machinist cutting and other tools as expense or assets?

Loren

I started reading other posts on how to categorize tools and right off it seems even something this simple is opening a can of worms of possibilities so I'll ask here instead. There are tools like measuring tools and setup tools that last until somehow they are damaged beyond use, and things like files and air tools that last sometimes years, and then cutting tools that pretty much are purchased for almost each job they're needed for. How do I handle this situation being the one man shop I am?
Also if the majority of the tools and equipment I'm using were mine before starting the business last year, do I have to claim them as business owned now or is there no need to do anything about that quandry?

KiahD

Hey @Loren ,

You can record the purchase of your tools as that of Capital Assets. Since they were purchased by yourself before starting the business, what you can do is record the transfer of the personal assets to your business. To record this please follow the third set of steps in this Help Centre article.

For more information on how to record depreciation of these assets, please take a look at this Help Centre article.

Please Note that recording depreciation can get complicated, so I recommend reaching out to a registered CPA for advice on the best way to do so for each asset that you own