As a new electrician, you likely have a lot to learn about the field. You should also focus a lot on the business side of the industry. Taxes are a huge part of the business, especially if you plan on starting your own company. Even during early days through an apprenticeship or classroom learning, you can find a lot of tax deductions and ways to save as you begin your career path.
Follow this guide to learn about possible tax deductions. With the possible options, always consult with a tax expert to ensure you do your tax deductions correctly and follow the guidelines set by the IRS.
Tools and Supplies
When you start a new career from scratch, you will have to put a lot in early on. In the field of electricians, you will need to build your tool supply. If you work for another company under an apprenticeship, tools will likely be provided for you, but courses and personal training will require tools of all kinds.
Having your own set of tools also makes the transition easier when you are ready to branch out on your own. The tools you purchase are a key part of your tax deductions. Save receipts for the tools you purchase to ensure you get the exact deduction.
When deducting the costs of tools, you often have multiple options. You can get the full deduction right away or expand the deduction to include multiple years of use. The multi-year tax deduction is known as depreciation. For example, if you purchase equipment you think will last for five years, then an even percentage is deducted each year.
Education and Training
Electrical education is a crucial element to becoming certified, and you can find many tax advantages with your education. As you attend classes, the tuition and book fees are typically tax-deductible if you took out student loans to pay for the schooling. You can also receive deductions for any student loan interest you pay during your education.
The education deductions are not usually just a one-shot deal either. The world of electricity constantly changes. If you want to return to take advanced courses or courses on new technology, then you can often deduct those costs in the future.
When you start an apprenticeship, you will often spend a lot of time on the road and working at locations. Naturally, making meals and snacks each day can present challenges, especially if you work long hours. When you eat out for your business, you can accrue a lot of costs along the way. A percentage of the meals you eat is often tax-deductible and can help reduce your overall taxes.
When on the road, you should keep your receipts or at least take pictures of each receipt to have a record of places you’ve eaten. The deductions vary per person but is typically a percentage of your total dining for the tax year.
As you begin your career as an electrician, you may do a lot of work from home. Your business may include invoices, computer scheduling, and daily bookkeeping. The preparation of your home office may also include purchasing furniture like computer desks and chairs.
Keep track of all your home office purchases for deductions. The office expense deduction is common for independent contractors. Even if you are an apprentice, you may have home office needs as you prepare resumes and plan out future business ventures.
Enroll in our classes at the Independent Electrical Contractors of Greater Cincinnati to take advantage of tax deductions and get the most out of your education. The money savings can help you successfully launch your career without a heavy load of debt or extra costs.