Can any part of a new roof cost be claimed as business expense if we have a home office for self employment?

[Vanessa A]

Not directly.  However, the roof can be added to the cost basis of the house and depreciated as part of the entire house. 

[Hobnf]

Excellent, thank you Vanessa. Where do I enter that information using Turbotax Online?

[Vanessa A]

To add the cost of the roof to your home office select the following:

• Wages and Income
• Review next to Self Employment
• Review next to the business
• Either Start or Review next to Home office (if you do not see home office in the list you can click add expenses for this work and select home office)
• As you walk through answering the home office questions, you will come to a question asking if you want to take the simplified method or the actual expenses.  The simplified method will give you $5/sq. ft. for up to 300 sq. ft. The actual method will allow you to enter your actual expenses and the depreciation
• If you choose the actual expense method, you will continue through and select No, all of my expenses apply to the entire home. 
• When you get to the section to Enter Repair expenses, you will be asked about repairs and maintenance....do NOT enter the roof here.  Click continue.
• You will come to a section for Depreciating your Home.  Here you will click An improvement to your home and continue.  
• Enter the roof description, cost and date you had it installed. 
• Select no, this is an improvement to the ENTIRE home
• continue through to the end of the section.

You may find that depending on the size of your home office and your other expenses that the Simplified Method results in a better outcome, however, it is best to go through the actual expense process so you are sure to get the biggest deduction.  Also, your home office deduction is limited to your business income.  It cannot cause you to have a loss. 

[Hobnf]

Thank you very much!