Tax Deductible Home Repairs

A lot of people do not realize it, but they can actually increase the value of their properties through repairs and still claim these repairs as tax deductible home repairs. According to the Internal Revenue Service (IRS), home repairs that increase the value of the property and prolong the life of the property are considered capital improvements. Any home repairs that fall within the category of capital improvements are considered tax deductible home repairs.

What Improvements Are Considered As Capital Improvements?

To be considered capital improvements and tax deductible home repairs, the repairs must be a permanent addition to the home. The permanent addition to the home must make the home more functional. Moreover, the permanent addition to the home must increase the value of the home and extend the useful life of the property. For instance, installing a new roof to your home is considered a capital improvement and tax deductible home repair. Why? First, the new roof can prolong the useful life of the home and second, it can increase the functionality of the home.

Other examples of capital improvement and tax deductible home repairs are driveway installation, installing a garage, placing of a fence around the home, adding a swimming pool and the likes. Installing a driveway and a garage at your home are considered as tax deductible home repairs because they enhance the value of the property.

Once a home has its own driveway and garage, it becomes more functional and can command a higher price in the market. The same principles also apply when it comes to the installation of fences and swimming pools. Having a fence around your home can increase the value of your home in the sense that fences give the occupants a feeling of security. On the other hand, the swimming pool makes life more enjoyable at home.

Yes, capital improvements can cost you a lot of money but since these are tax deductible home repairs, you can always recover the money that you investment in these home improvements. To recover your cost, you need to use the depreciation method on your property.

You can set up your tax deductible home repairs through depreciation. If you are not very familiar with depreciation computation, ask your accountant to compute this for you. On the other hand, if you do not have an accountant to work on you tax results; ask someone who is familiar with depreciation expense to show you how to compute it.