Can I write off a used excavator purchase for a side business without an LLC?

This is super helpful, thank you! Quick question - if I buy the excavator in 2024 but don't start making income until 2025, can I still deduct it on my 2024 taxes? And if H&R Block typically does my taxes, should I look for a different tax preparer for this situation?

You can still potentially claim the deduction in 2024 even if you don't have income yet, as long as you can demonstrate you've started the business activities (advertising, business cards, website, etc.). The lack of income might raise red flags though, so documentation of your business development efforts is crucial. Regarding H&R Block, it really depends on the specific preparer's experience. Some H&R Block preparers are excellent with small business taxes, while others primarily handle simpler returns. I'd recommend asking them directly if they're comfortable with Schedule C business deductions and Section 179. If they seem hesitant, consider finding a CPA or EA (Enrolled Agent) who specializes in small businesses.

Does this tool actually help with the physical filing process or just tells you what you qualify for? I'm in a similar situation with some construction equipment I bought.

I'm skeptical about online tax tools... How does it handle the "business intent" part? Seems like that would be something difficult for software to determine.

It doesn't file your taxes for you - it's more like having a tax expert analyze your situation. You get detailed guidance on what you qualify for and documentation recommendations that you can take to your preparer or use when filing yourself. The business intent part is handled through a detailed questionnaire that covers all the factors the IRS looks at - how you're maintaining records, your business plan, marketing efforts, expertise in the field, etc. It gives you a "risk assessment" for various deductions based on your specific situation and recommends additional documentation that would strengthen your case if you ever got audited.

Wait, how does this actually work? Does it just dial for you or what? I've been trying to get through to the IRS for 3 weeks about my business tax ID.

Yeah right. No way this actually works. The IRS phone system is designed to be impenetrable. I'll believe it when I see it.

It's not just auto-dialing. They have a system that navigates the IRS phone tree and stays on hold for you. When they finally get a human agent on the line, they call your phone and connect you directly to that agent. No more waiting on hold for hours or getting disconnected. The whole point is saving you from wasting hours on hold. I was skeptical too until I used it. I spent literally 4 hours trying to get through myself over multiple days before giving up and trying their service.

That's really good to know, thanks! Is there any specific way you need to track usage to prove the business percentage? Like a logbook or something?

Yes, definitely keep a usage log! I learned this the hard way. Document dates, hours of operation, and whether each use was personal or business. Take photos of job sites where you're using it for business purposes. Keep all receipts for jobs where you used the equipment. If you're using it on your own property sometimes, be very clear about which uses are business-related (like digging a trench for a paying customer) versus personal (improving your own property). The more detailed your records, the better you'll be if you get audited.

Did TurboTax handle all the Schedule C stuff well? I'm considering using it this year but worried about missing deductions for my new pressure washing business.