Starting Your Business

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; however, 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. See "deductible expenses" and "capital expenses" in Publication 535.

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 "cost of goods sold" as a separate business expense.

Important References:

Publication 334                    Tax Guide For Small Business (For Individuals Who Use Schedule C or C EZ)
Publication 535                    Business Expenses
Publication 587                    Business Use of Your Home
Schedule C (Form 1040)    Profit or Loss from Business
Instructions for Schedule C (Form 1040)