topic Deducting detached workshop in Deductions & credits

Deducting detached workshop

DarrenH — Mon, 09 Mar 2026 05:06:30 GMT

Spent last year building a detached workshop on my property exclusively for my new home based business. I got a loan for the base structure which I make monthly payments on and paid out of pocket for all the other building materials (Home Depot and Lowes) which were needed to complete the shop. I'm trying to figure out exactly how and where I should be inputting these costs. I had significant expenditures last year to complete the shop which wasn't done until November and therefore the new business had very, very little income. Any help is greatly appreciated.

Re: Deducting detached workshop

AliciaP1 — Thu, 24 Feb 2022 03:22:02 GMT

You will enter this as an asset for your business. To do this in TurboTax Online please follow these steps:

Within your tax return use the magnifying glass icon to search for Schedule C
Click the Jump to link
Click Edit for the line of work
Scroll down and click Add expenses for this work
Scroll to and click Add for Assets - if you don't see it on the list, scroll down to the Less Common section and click the down arrow and show more until you do
Click Continue
Click Start for Assets
You will treat the whole cost of building the workshop as the asset so answer No to Did you buy any items for any business, rental property and/or farm that cost $2,500 or less in 2021?
You will also choose No to Did you make improvements to a building you used for this business in 2021?
Choose Real Estate Property to Describe the Asset
The date purchased will be the date you started using the workshop for your business and then click Continue
Choose Nonresidential real estate and Continue
Name your asset - Workshop works!- and enter the total cost of buying the base structure and all the purchases to complete the building
Leave the land cost blank since this is still your personal property
Choose I purchased this asset new and Yes, I've always used this asset 100% for business
Enter the date your business started (which is the date of purchase) and click Continue

TurboTax calculates the depreciation and enters it on your Schedule C for you.

Re: Deducting detached workshop

DarrenH — Sun, 27 Feb 2022 18:26:32 GMT

Awesome! Thank you so much. One last question. Do I include finance charges in the total cost of the base structure since I financed it over 5 years?

Re: Deducting detached workshop

PattiF — Mon, 28 Feb 2022 01:36:47 GMT

The finance charges would be deducted as an annual expense for the business Schedule C as interest.

Re: Deducting detached workshop

acleantub — Tue, 19 Apr 2022 14:29:53 GMT

We have a detached workshop and our accountant is refusing to deduct it on our 2021 tax filing (this is a new accountant to us). We use the workshop for storage of supplies and actual work. What article can I point out to this accountant to help convince her that this is a legitimate tax deduction?

Re: Deducting detached workshop

AmyC — Tue, 19 Apr 2022 15:21:11 GMT

Small Business and Self-Employed Tax Center has everything you could ever want including Expenses, Business which of course covers Business Assets. You may want to do your own taxes since you know more than the accountant.

@acleantub