Are Home Repairs Tax Deductible? A Complete Guide

As you getting started in the world of repairing and improvement of your home? Whether you’re preparing your place to be sold, or you’re trying to make your home look and feel a bit better, you ‘ll find that your repairs are going to cost a bit in terms of expenses. Are any of these expenses tax deductible? That’s what you’ll learn here.

Whether you are paying for tools, new features, appliances, or something else entirely, you might be wondering if your costs are tax deductible. After all, depending on the repairs you are taking on, death could be a certainty, so you might as well get your taxes squared away while you can!

Here’s what you need to know!

How Do Home Repairs And Taxes Work?

For many homeowners, general repair and maintenance of a home is not tax deductible. Businesses have some leeway on certain things (and home-based businesses certainly do, as you’ll see). For home repairs, you won’t be able to do anything on your income tax if you’re just a regular employee.

There are some medically necessary home improvements that can have tax breaks associated with them, even if you are an employee or retired. But for the majority of home repairs and minor improvements, they are not tax deductible in the usual way. There are also programs related to energy efficiency that can vary from state to state and even city to city. These may offer tax incentives. There may even be federal tax incentives and outright grants for certain upgrades related to energy efficiency.

Home-Based Business & Work-From-Home-Situations

This is where things get good. Depending on where you live and the local tax laws, it’s typically possible that home improvement and maintenance costs can be considered a deductible expense on your income tax, in proportion to how much of your home’s floor area is used to generate income. This applies if you own your own business, but also if you’re an employee working at least some time from you. For example, if your home office occupies 10% of the total living space of your home, then 10% of your home maintenance costs can be deducted from income each year. Home expenses that are immediately deductible (if you’re situation is right) include heating and cooling costs, repairs, cleaning costs, insurance, property taxes and others.

But not all home costs are the same. You need to make a distinction between actually “expenses”, and what the tax people call “capital improvements”, as you’ll see.

What About Capital Improvements?

Capital improvements differ from the rest of your home improvements and repairs because they actually improve the value of your home and they deliver value over a long period of time. This is why capital improvements need to have their value depreciated over time. Adding a deck, modernizing your kitchen, or repairing your roof are all things that can add to the value of your home and all things that can have tax breaks attached to them.

These tax breaks are often added to the cost basis of your home, and sometimes the home repairs can be folded into massive improvements. For example, if you are replacing a broken window, that will be counted as a repair, but if you are remodeling your windows and thus replacing all the windows, you can count that as an improvement. All of this is highly situational, depending on the tax laws where you live, but you can often fold your home repairs and home improvements for tax purposes if you work at home in some capacity.Google “tax deductible home improvement expenses” along with the state, province or country where you live .

Payment Options For Home Repairs

Even if your situation means you can’t do much tax wise with your home repair costs, you still need to decide then how do you pay for them? This is especially true with large emergency repairs. You can simply pay for the home repairs in cash or with a card, of course, which can be very useful for small or medium repairs or trips to the hardware store. Often many repairmen and repair companies will have portable scanners that they can use to process credit card payments on the spot. Which makes it extremely easy to make all of those essential payments right away.

If you need to pay for bigger home repairs, you don’t necessarily need to get your checkbook. Personalized check templates are available online that you can use in order to create a check on the fly in order to pay the people and organizations that will be working with you. There are countless ways to pay for home repairs, and the easiest way that allows the money to leave your hands and to get into the hands of the people who want to repair your home can be the best way. And if you do have the option to deduct these costs from your income, then you’ve automatically got the paper trail you’ll need to prove it to the government. The last thing you want to do is pay for home repairs or improvements under the table if you can claim them. Financial transactions done with cash and no receipt can never be tax deductible.

Ask A Professional For Home Repair Tax Help

Taxes are going to be confusing no matter what, and having to deal with taxes while also having to repair your home and potentially get it ready to sell can be extremely frustrating. Instead of ripping your hair out and trying to get to where you are handling everything yourself, don’t be afraid to reach out and get some professional help. It often doesn’t take much. A professional will be able to help you figure out what home repairs are useful and what home repairs won’t do anything for your taxes, so don’t ever be afraid to ask for some help!