Did you know that, if eligible, you can claim welder tax deductions on your income tax return or on your Schedule C? This guide will review some of the welder tax deductions that students, self-employed, and FTEs can take. However, please refer to the IRS for specific details about tax deductions1.
Who is Eligible for Welder Tax Deductions?
Full-time equivalents (FTEs), students, and self-employed welders have the option to deduct specific tax deductions from their taxes.
Types of Welder Tax Deductions for Students, Self-Employed and FTEs
Some of the unreimbursed, job-related expenses can be deducted from your tax return. A few of the welding related deductions2include:
Subscriptions to Trade Journals
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There are four welding publications you should know about. They include Practical Welding Today, The Welding Journal, Welding in the World, and Welding Design and Fabrication Insider. If you pay a subscription fee for any of these trade journals or any other welding journals, you can deduct the cost from your taxes.
Trade Association and Union Dues
There are many welding trade associations and unions that you can become a part of. The leading welding trade association is the American Welding Society (AWS)3. Additionally, one other union that many welders are a part of is the United Association of Plumbers, Steamfitters, and Welders4.
Insurance Premiums for Protection Against Liability or Wrongful Acts
Unfortunately, accidents happen, and it is essential to have insurance that protects you against liability or wrongful acts. It may cost a little each month, so you don’t have to pay a lot if an accident happens.
Specialized Welding Equipment that is Replaceable within One Year
For that specialized welding equipment that is replaceable within one year, you can deduct the full cost from your taxes. For the specialized welding equipment that you use for more than a year the tax deduction must be amortized over multiple years.
Safety Equipment
As a welder, you must wear specialized clothes to keep you safe. These include steel-toed boots, welder’s masks, welding jackets, leather gloves, respirators, and earplugs, to name a few.
Cost of Uniform Upkeep
There are many things you must keep clean and cared for that are not part of everyday wear and are specifically required for work. These include coveralls, hard hats, work gloves, safety shoes, and welder’s goggles, which upkeep of are tax deductible.
Government Fees
Some government fees you can deduct from your taxes include state or local government regulatory fees, licenses, and flat-rate occupational taxes. However, this excludes any initial certifications and licensing required to become a welder.
Types of Welding Tax Deductions for Self-Employed Welder who Files a Schedule C
If you’re self-employed and file a Schedule C, here are some welding tax deductions you can claim:
Bad Business Debts
Let’s say you complete a project for a client, and they don’t pay you 100% of your fee. Once you determine that they will never pay you, you can deduct the bad debt from your taxes.
Vehicle Transportation Costs
Include the expenses for a car or truck to get from one work site to another. You can even deduct the travel from your last work site to your home if you report a home office on your taxes.
Independent Contractor 1099
As a self-employed welder, any contractors that you pay more than $600 within a tax calendar year must be reported with a 1099 tax form. This can be included in your Schedule C as the cost of doing business.
Legal & Professional Fees
You may need an accountant or attorney to help close a deal or complete your taxes. These costs are tax deductible on your Schedule C.
Rental Expenses
Rental expenses can be deducted and can include the business use of property, including things like trailers and equipment rentals.
Travel Expenses
This deduction includes travel away from your business home for more than the time spent on an ordinary day’s work. It includes mileage, tolls, parking fees, lodging, and meals. Some
deductions are only given as a percentage of the total cost. Refer to your accountant or the IRS for more information about travel expenses.
Advertising
Do you advertise your welding services on billboards, the side of buses, Angie’s List or other online websites? This is the cost of doing business and can be deducted as advertising from your Schedule C.
Tools and Equipment Repairs and Maintenance
Most of your welding tools will need repairs and maintenance to keep you safe and them working properly. This expense can be deducted from your taxes.
Supplies and Incidental Materials
Welding supplies are tax deductible and include things like welding wire, cable, electrodes, rods, regulators, flowmeters, plasma consumables, and other welding supplies and incidental materials.
Business Excise Taxes & Personal Property Taxes5
Excise taxes are imposed on certain goods, services, and activities. This can include the tax on heavy highway vehicle use. Personal property tax is a value-based property tax on property owned or leased by a business.
Don’t Leave Money on the Table
Remember, as a new tradespeople, staying informed about different types of welding tax deductions can maximize your savings and keep your business running smoothly— don’t hesitate to consult a tax professional to ensure you’re making the most of available benefits.
The Professional Welder program at Tulsa Welding School’s starts by helping you know what it’s like to be a welder in interactive workshop courses and welding booths. You’ll be trained in structural, flux core, and pipe welding in as little as seven months. You’ll also be prepared to excel in job interviews and welding tests for various certifications. Read about the types of welding careers you can pursue with your skills. Ready to start a Professional Welding program? Contact us today about our welding certification preparation program.
- https://www.irs.gov/
- https://www.jacksonhewitt.com/tax-help/tax-tips-topics/employment/job-specific-deductions/welder/
- https://www.aws.org/
- https://ua.org/
- https://www.irs.gov/businesses/small-businesses-self-employed/excise-tax#:~:text=Excise%20taxes%20are%20taxes%20imposed,sale%20or%20use%20after%20importation
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