First time with "self-employed" for wife - Home Expenses - Repair section question

[Varsuuk]

Hi there, my wife did self-employment stuff with small home office. Only 81sqFt...  But they have me filling out this part: "Tell us about XXX's home expenses - We're looking for XXX's total expenses for the home here, not the home office. [bolding is TT's] There are certain deductions that can save you money for your home and home office. We'll ask about XXXX's home office expenses next.

REPAIRS - I clicked to see what. We had a lot of roof leaks in our first months there and finally had to get a new roof. We also replaced broken screen (example give) and leaks in faucets (not sure if THOSE are the "leaks" meant?) here is the text of the "learn more":

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What are Repair and maintenance expenses?

Repair and maintenance expenses are the ordinary and necessary expenses you pay to manage, conserve or maintain your property.

Repair expenses :

- Keep your property in good operating condition
- Don't materially add to the value of your property
- Don't substantially prolong your property's life

Examples of repair expenses include:

- Fixing leaks
- Fixing heaters, air conditioners, appliances
- Replacing broken windows and screens

If you spent money to enhance your property, restore your property, or adapt your property to a new or different use, then you paid for an improvement, not a repair expense. You deduct the cost of the improvement by depreciating it over a period of time.

[AnnetteB6]

Certainly the roof leaks that were repaired is considered a repair expense.  Replacing the broken screen and the faucet leaks are also considered a repair expense for your whole house.  

Replacing the roof itself is an improvement because it is restoring the roof to a good condition and must be depreciated as a component of the whole house.  

When you enter these expenses as part of the home office, a proportional amount of the total cost will be included as a home office expense.  This amount is based on the square feet of the office as compared to the total square feet of the home.  For example, if a 100 square foot home office was claimed with a total 1000 square foot home, then 10% of the cost of repair expenses would be claimed as a home office expense.

[Varsuuk]

@AnnetteB6 

OK - then I will simply not include the roof repair since it was a completely new roof. I am not trying to push the envelope - just not stupidly exclude something because I misunderstood.

I am aware it is a percent, in this case 3.76% 😉 it's small. MY home office is very large since we bought the house knowing I would be using it exclusively for work from home and I have space for bookshelves for all my programming references and places to store all our printed specs etc. Plus multiple pcs etc. But... the 2017 thing removed home office for regular employees which is what I am.

But one related question - when I asked someone who does taxes (a friend so...) she said that home repairs are not deductible. Which, actually was my understanding was the case. But on TurboTax, for Home office it has like 5 categories of things to enter for the HOME (not just office) and one is "repairs" as described above. So, things like leaky faucets, broken door and cracked ceiling etc seem to match the description given there clearly and you seem to agree. I know you can't speak to her mind, but she has a lot of experience - I wonder what she was thinking when said I should remove all repairs (totalled 2,986 - so less than $100 deduction I am guesstimating without a handy calc load) from the form (she said schedule A but I didn't verify where TT puts that) or it may raise flags.

I definitely don't want to cheat and I know no one here is giving advice for that - so I just wanted to make sure I understood that I CAN put repairs for the house in general in that part and that Turbo correctly determines if it reduces me or not for her "home office" percent.

Thanks once again - things are crazy - rushing to pack to flyt to Florida tomorrow - dad in hospital and it's not optimistic.

[Varsuuk]

Mind you, I just DID remove it to see... and it amounts to $27 to Federal and $8 to NY State total savings  - so if there is anything about it that mught be "funny", I definitely don't want to include the ceiling/faucet/door/detached-sink repairs.

[Varsuuk]

(sorry for spam) - it just also strikes me as weird, because non of those 4 repairs occurred in the home office space (the 6' x 13.5' actual office)  - ironically, one, the ceiling, occurred in MY home office (which is not counted as such anywhere on my taxes 😉 )

[AnnetteB6 · Accepted solution]

The idea behind claiming repair expenses pertaining to your whole house is that the home office is a percentage of the whole house (3.76% for you).  The home office is considered to be a 'business' space.  Businesses are allowed to deduct repairs pertaining to their business.  So, 3.76% of your house is a business space, therefore you can deduct 3.76% of the total cost of repairs that you made to the house during the year.  

If there had been a specific repair or project (like painting the office, for example) that only pertained to the office area, then you would be able to deduct 100% of that expense.

All of the home office expense is reported on Form 8829, which then goes to Schedule C Business Income and Expenses.  Schedule A is not involved with this at all, and in general, home repairs are not deductible.  As explained above, you are only deducting the portion that is attributed to the business portion of your home.

That being said, there is nothing out of line or risky in deducting the 3.76% of home repairs, but you are not required to do so.  You can certainly leave that off of your return.  

Safe travels for you and healing thoughts for your dad.

@Varsuuk