When Are Home Repairs Tax Deductible?

Are Home Repairs Tax Deductible, and What qualifies as a 'home repair'?

Frequently, tax clients ask 'are home repairs tax deductible', wondering about whether they can deduct home repairs, referring to both simple and major repairs to their home or rental property.  These typically include roofs, HVAC units, plumbing, electrical, etc.  For tax purposes, these are nearly all the same and fall into one of two categories: disaster related and non-disaster related, referring to whether the repair was required as a consequence of damage during a nationally recognized disaster in a federally declared disaster zone.

are home repairs tax deductible

Determining Deductibility

Two questions matter: 1) Is it your primary/secondary residence or a rental/business property?  2) Did it occur from a disaster in a federally declared disaster zone?

Primary/Secondary Residence

If the repair occurs in your primary/secondary residence, and the repair is related to a national disaster, then it is deductible on your schedule A, an only mildly favorable method of claiming deductions.

If the repair occurs in your primary/secondary residence, and the repair is NOT related to a national disaster, then it is not deductible.

Rental/Business Property

Conversely, repairs made to a rental or business property are fully deductible and in more favorable ways, typically on schedule E or C or under a corporate/partnership filing, all of which are more favorable than schedule A.

But how it is deducted depends on the repair.  An HVAC tech coming out and performing a simple repair will likely be expensed in full during the year of the repair, while a brand-new HVAC system will likely be depreciated over several years.

When It Is Deductible, What Do I Need?

Your tax preparer does not need the receipt.  Tax preparers are allowed to take you at your word that you spent the money on what you say you did.  But you do need some kind of a record, even a handwritten record, of your expenses to present your preparer.  Verbal presentations are frowned upon, but not forbidden, as they raise due diligence concerns regarding accuracy and truthfulness.

Keep your receipts in case you're ever audited, but simply having a written list of home repairs with what property they relate to for your tax preparer is all you need.  From there your tax expert will ask questions to further determine eligibility.

When in Doubt, Ask an Expert

Don't wonder 'are home repairs tax deductible' every again when you have us here to ask!  When you're unsure if something is deductible or not, our experts love answering your questions.  We are happy to answer questions through in-person or remote consultations, and initial consultations are always free.

For more information Contact Us today!  To learn more about our expert tax prep services, check us out here.