Tax, Bookkeeping & Equipment Depreciation

Not tax advice. Practical knowledge of how laser shops handle the books in the US. The right structure here saves thousands at year-end. Find a CPA or bookkeeper for your specific situation.

Schedule C basics (US sole proprietor / single-member LLC)

If you operate as a sole proprietor or single-member LLC, your laser business income is reported on Schedule C of your personal tax return. Key sections:

• Gross receipts (revenue): total customer payments before any expenses.
• Cost of goods sold (COGS): material costs (blanks, sprays, finishing supplies). Keep separate from operating expenses.
• Operating expenses: utilities, software subscriptions, ventilation supplies, internet, business phone.
• Depreciation: equipment value spread over years. See below.
• Net profit / loss: flows to your 1040.

Equipment depreciation: three approaches

A $5,000 laser is a major asset. You can write it off in three ways:

• Section 179 deduction: write off the FULL cost in the year of purchase. The 2026 limit is $2,560,000 with the phase-out beginning at $4,090,000 of total Section 179 property placed in service. Most laser shops will be nowhere near those caps and can deduct the full machine cost in year one. Requires the equipment to be used >50% for business. Limits are inflation-adjusted each year. Confirm with your CPA before filing.
• Bonus depreciation: under the One Big Beautiful Bill Act (OBBBA, signed July 4, 2025), 100% bonus depreciation was restored permanently for qualified property placed in service after Jan 19, 2025. Stack this with Section 179 for big-ticket purchases. Pre-OBBBA sources still show the stepped 80% / 60% / 40% phase-down, that schedule is no longer in effect. Verify with your CPA.
• MACRS depreciation: spread the deduction over 5-7 years. Lower year-one impact but predictable.

For most laser shops with one or two machines, Section 179 is the right answer. Talk to your CPA about which year is best to take it (sometimes deferring is better if you expect higher income next year).

Expenses to track

Category	Examples
Equipment	Laser, compressor, chiller, fume extraction, computer, calipers, accessories
Software	Lightburn license, Adobe subscription, accounting software
Materials (COGS)	Blanks, marking spray, finishing supplies, packaging
Consumables	Lens cleaning supplies, IPA, painter's tape (3M ScotchBlue 2090), Oramask 813 for tumbler/curved-metal work, lens replacements
Utilities	Electricity (% allocation if home shop), internet, business phone
Marketing	Etsy fees, advertising, business cards, photography props, website hosting
Education	Online courses, books, conference tickets, magazine subscriptions
Insurance	Business owner's policy, equipment rider, liability insurance
Travel	Trade shows, supplier visits, customer pickups. 2026 IRS standard business mileage rate is 72¢/mile (Notice 2025-69; up 2¢ from 2025's 70¢). Always confirm the current year on the IRS site before filing, rates are published in mid-December for the following year.
Professional fees	CPA, attorney, business registration
Home office	If running from home: % of mortgage/rent, utilities allocated to laser space

Bookkeeping software options

• QuickBooks Solopreneur (the successor to QuickBooks Self-Employed; Intuit retired QuickBooks Self-Employed for new sign-ups), easiest path for sole proprietors. Auto-categorizes transactions; mileage tracking included. Verify current pricing on Intuit's site.
• QuickBooks Online (~$35-275/mo depending on tier, Simple Start, Essentials, Plus, or Advanced) for LLCs / S-corps. More features the higher you go.
• Wave (free core; ~$16/mo Pro tier for unlimited bank connections + receipt capture), solid free option for small shops.
• FreshBooks (~$19-65/mo across Lite / Plus / Premium) invoice-focused; good for service-heavy shops.
• Spreadsheet (free), fine for under $25K/year revenue. Manual but cheap.

Receipts & documentation

• Photograph or scan every receipt immediately. Use a receipt-scanning app (Expensify, Shoeboxed) or just your phone's camera roll.
• Keep digital archives for 7 years (IRS audit window).
• Separate business and personal accounts: open a business checking account. Mixing = audit nightmare.
• Business credit card: earn rewards on equipment purchases AND keep records clean.
• Mileage log for any business driving. Apps like MileIQ (~$8.99/mo individual; free tier covers 40 drives/mo) automate this.

Sales tax

• Most US states require collecting sales tax on tangible goods you sell.
• Apply for a Sales Tax Permit in your state, free or low-cost.
• Online sales (Wayfair v. South Dakota): some states require collection from out-of-state sellers above thresholds (often $100K/yr or 200 transactions).
• Etsy / online platforms often collect and remit on your behalf for marketplace facilitator states. Verify with each platform.
• Service-only engraving (no goods sold), varies by state. Some tax services, others don't.
• Tax-exempt certificates from wholesale customers, keep on file.

Quarterly estimated taxes

If you make >$1,000/year profit, IRS expects quarterly estimated tax payments:

• Q1: April 15
• Q2: June 15
• Q3: September 15
• Q4: January 15 (next year)

Self-employment tax = 15.3% (Social Security + Medicare). Federal income tax on top. Plan ~25-30% of net profit set aside for taxes.

Health insurance & retirement

• Self-employed health insurance: premiums fully deductible. Marketplace plans + spouse-employer plans both work.
• SEP-IRA: contribute up to 25% of net self-employment income (capped). Tax-deferred.
• Solo 401(k): higher contribution limits than SEP-IRA. Setup is more complex.
• HSA if on a high-deductible health plan, triple tax advantage.

When to hire a CPA

• Once revenue exceeds ~$30K/year, the time savings + tax savings outweigh the fee.
• When forming an LLC or S-corp, entity selection has long-term tax implications.
• For your first multi-state sales tax filing.
• When buying a major piece of equipment ($5K+).
• Cost: $300-2000/year for small laser shops. Worth every penny.

Cash flow basics

• Aim for 30-50% net margin on personalized engraving. Lower than retail but higher than service businesses.
• Reserve 25-30% of net profit for taxes.
• Budget 10% of revenue for equipment maintenance + replacement.
• Build a 3-6 month emergency fund: slow months happen, equipment fails.