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