Video: Home Repairs & Tax Deductions
Hello, I'm Jeremy from TurboTax with some information on how to treat your home repairs for federal income tax purposes.
If you own a home, you probably enjoy a wide range of tax deductions including those for property taxes and mortgage interest. However, you are generally not allowed to deduct the cost of repairing your home.
One of the few exceptions to this rule is if you suffer a casualty.
- Casualties usually cover those sudden and unexpected events that cause damage to your property such as a hurricane or car accident.
- Essentially, these are events that you have no control over and that are in no way the cause of your own negligence.
For example, if you live on the coast of Florida, you are no stranger to making home repairs after hurricane season.
- For each separate hurricane that occurs, you can deduct the cost of repairing any damage to your home.
- However, casualty deductions are subject to numerous reductions, especially if you have insurance coverage for the damage.
Another way to deduct the cost of repairs is if you rent the home to tenants. Since the home is considered an investment property, you must report all rental income in order to deduct the related expenses including ordinary and necessary repairs.
If you've made improvements to your home, some of those costs may be deductible particularly if you improved your home's energy efficiency.
For more tax tips and guidance, visit TurboTax.com.
