Step 3: Drilling

Picture of Drilling
I always pre-drill any spot a nail or screw will go into to ensure the wood doesn't split. Make sure the bit is slightly smaller than the fastener itself. It can be a little tedious, but it's a lot less frustrating than ruining and having to re-cut another piece of wood. For the beginning woodworker, the satisfaction of knowing you did the best possible job with limited knowledge is kinda rewarding as well.

I put (3) pilot holes along the lower edge of both end pieces and into the box bottom.
and (4) pilot holes, two on each side for the lower side pieces
and (2) pilot holes, one on each side for the upper side pieces

For the four handle holes, I used a paddle bit that was the same diameter as the rebar. Put scrap wood under the end piece you drill into to reduce tear out on the other side. Find the center of the width and mark. Then strike a line across that's about 1" from the top. Then mark off an equal distance on both sides of the center line. Drill two holes on that end piece, then align it with the opposite end, trace the holes, and drill the second set of holes.

I drilled my holes 5/8" from the top and spaced 3/4" from the center line. Don't do this.

If I were to redo this project, I'd drill the holes 1" from the top and spaced 11/16" from the center line.

The toolbox is sturdy enough, but I'd feel better with an extra 1/2" or so of wood between the handle and edge.
The 11/16" seems like a small amount, but when both sides are accounted for, it results in a gap that's 1/8" smaller and it'd give the tools a little less wiggle room.

If your handle is made from something other than the standard sized 1/2" wide rebar I used, your measurements will be different and should be adjusted appropriately.