Starting Your Business/Keeping Tax Records
What are Business Expenses
Repairs & Maintenance
The cost of repairing or improving property used in your trade or
business is either a deductible or capital expense. You can deduct expenses to keep your
property in a normal efficient operating condition. But you must capitalize expenses that
add to the value of your property or significantly increase its life. Although you cannot
deduct capital expenditures as current expenses, you can usually deduct them over a period
of time as depreciation.
TIP. The cost of repairs includes the costs of labor, supplies, and
certain other items. You cannot deduct the value of your own labor.
Examples of repairs include the following.
- Patching and repairing floors.
- Repainting the inside and outside of a building.
- Repairing roofs and gutters.
- Mending leaks.
You cannot deduct the cost of repairs that you added to the cost
of goods sold as a separate business expense.
Important References:
Publication
535
Business Expenses
Form
1040 Schedule C Profit or Loss
from Business