The $6,500 spent on a new roof for your woodworking shed is considered a capital improvement and should be depreciated over its useful life, typically 39 years, using IRS Form 4562. You may also consider a section 179 deduction or bonus depreciation to deduct a significant portion of the cost in the year it was placed in service.
Follow detailed instructions at this link to enter business assets/capital improvements (select TurboTax Online or Desktop based on which version you are using):
Here's a summarized version of the TurboTax Online steps:
- Open or continue your return and go to business expenses.
- Answer "Yes" to having self-employment income or expenses.
- On the self-employed work summary screen, select "Review" or "Add another line of work."
- Follow the on-screen instructions to enter your self-employment details.
- Select "Assets" on the expense categories screen and continue.
- Answer the questions about additional expenses and select "Keep going."
- On the Expenses screen, select "Edit" next to the Assets category.
- Answer "Yes" to buying or owning depreciable assets related to the business.
- Answer "Yes" to buying items costing $2,500 or less in 2024.
- Follow the on-screen questions about each item you bought.
- If you bought items for $2,500 or less, enter them in the Expenses section.
- If you didn't buy such items, answer questions about building improvements.
- If you made building improvements, follow instructions for the Safe Harbor Election for Small Taxpayers.
