In QuickBooks, small tools fall into two different expense categories: inventory and products and services. If you own tools that you use frequently, you can claim them as an expense. However, if you have large tools that you only use for a short period of time, these tools can be classified as assets. These categories differ slightly because tools are often part of an ongoing project, while small tools may be used on a sporadic basis.

Small tools, on the other hand, are those items that a worker uses on a regular basis to perform his or her job. These items do not require substantial storage or licensing costs. Examples of small tools include impact drills, screwdrivers, threaders, benders, wrenches, and cell phones. Small businesses often need equipment for specific tasks, and the items they use should be categorized as “small tools and equipment.”

If you own tools and supplies that you use regularly, they can be classified as assets or expenses. Some tools, like laptops, are fixed assets. These items, which can last a year or longer, can be written off as expenses if their value exceeds a certain amount. However, laptops may be considered an asset if their cost is higher than the capitalization limit for the asset. But, if you have to replace them frequently, you will need to deduct their cost from your income.