Deducting Your CNC Equipment

CNC is anything but cheap, but there are ways to make it more cost effective.

Besides the obvious of using your machinery and talent to make products for pay, it is also possible to deduct your costs on your taxes.

Under Section 179 of the IRS code it is possible to expense qualifying equipment on your taxes.  Under most cases CNC machinery, software, and tooling qualifies without any questions.

How it works.

Section 179 of the IRS Code businesses can deduct 100% of the value of the equipment in the year it was put operation.  This is different from depreciation insofar is it can be done in a single year and not over a long period.

You need to be a for profit business.  This is a very general category.  You never have to file any corporate forms or file any paperwork, you just have to do activities that you PLAN to do for profit or income.  You can sell plans and kits through Industrial Hobbies, through a different venue, or simply by word-of-mouth.  How you run your “business” is irrelevant to the IRS, just that you intend to do it for profit.

Filing the paperwork is fairly simply.  You just complete a Schedule C and supporting documents when you do you taxes.  I should take you about another hour or so if you’re fairly organized.

Is this a scam?

Of course NOT and I encourage you to look up further information with your local IRS office or at www.IRS.gov, a good place to start is http://www.irs.gov/faqs/faq-kw128.html .  Also this does not correlate to our invitation to sell your products with Industrial Hobbies to form some sort of scam to the IRS.  It simply is a way to make your hobby produce a profit and put a little more money in your pocket. 

Think about it this way, if you made replicas of model engines and sold plans, kits, and complete replicas on IndustrialHobbies.com the IRS will want their cut.  You might as well get your cut from them too.  Remember it’s your money.

Additional Reading:  Make Money with Your CNC Mill