If you answer yes, the next screen says, “Let’s see if you can claim these improvements as expenses.” This screen refers to the Safe Harbor for Small Taxpayers rule I described in my article: “When Can Your Home/Land Improvements Be Deducted in One Year?” See my article: “When is a Home Improvement Now a Repair?”
So, you can enter repair expenses under the “Home Office” section of expenses. The bottom line is that many expenses now can be treated as a repair and deducted in one year. It doesn’t make a distinction between new shingles (a repair) and a new roof (depreciation).
Also, the list doesn’t include improvements such as new windows, flooring or remodeling. In other words, if you replace less than half the plumbing or wiring or cabinets or paneling in your home you can treat this as a repair and deduct it in one year, rather than depreciating it. It doesn’t take into account a recent rule that expands the definition of a repair vs.
So, when you check “no” the next screen will ask, “Did you make improvements to a building you used for this business in 2017?” If you click on “What counts as an improvement?” the software will list a number of examples: installation of new plumbing or wiring, addition of paneling to a room, installation of new cabinets, etc. Here is the additional major problem area to be aware of when using TurboTax:Ī screen will ask, “Did you buy any items for any business, rental property and/or farm that cost $2,500 or less in 2017?” It then says, “Don’t include items you’ve already entered as expenses.” Only check “yes” if you did buy items costing individually less than $2,500, but haven’t already entered these expenses into TurboTax earlier. Note: The IRS has a program where you can use the TurboTax software, as well as other tax preparation software, for free if you are income eligible. My previous article discussed some problems that you will encounter if you use TurboTax software to prepare your tax return.Īs I said then, I don’t recommend using any tax software unless you know what you can deduct, how to calculate the business portion of your deductions and where they go on the tax forms.
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