Plumbing Repairs Tax Deductible

Many people are curious about whether or not plumbing repairs are tax deductible, especially when they are paying for them out of pocket. While the answer is not simple, there are a few things to keep in mind when considering whether or not a repair is eligible for this tax break.

One of the biggest issues with deducting these expenses is determining whether or not the repair counts as a home improvement or simply a regular maintenance item. The IRS defines repairs as activities that bring your property back to its original condition. This means that a plumbing repair that involves replacing pipes, installing new fixtures, or other similar tasks does not qualify for this deduction. However, if the repair increases your property’s capital base or prolongs its useful life, it may be eligible for this tax break.

The IRS distinguishes improvements from regular maintenance items by stating that they add significant value to the property, or extend its useful life beyond its normal period of operation. The costs of these activities can be deducted in the year that they are incurred, while maintenance items must be capitalized and depreciated over time. This can make separating these two types of expenses challenging, so it is important to keep detailed records.

Are Plumbing Repairs Tax Deductible?

Another issue with deducting these expenses is deciding whether or not they are applicable to your rental property. If you rent out your house, apartment or condo, you will likely field many small repairs and maintenance assignments on a regular basis. These include cleaning an apartment between tenants, fixing broken doors, or setting mouse traps. Many of these expenses are deductible, but it is critical to keep track of them and to record all receipts.

If you use your home for business purposes, such as renting out a room or the entire house, you may be able to fully deduct the cost of these repairs. These expenses can be categorized as home office expenses or qualified business expenses, depending on the situation.

There are also certain energy-related activities that can qualify for this tax break. This can include repairing and installing solar heat pumps, upgrading to energy efficient appliances and lighting, and even switching to sustainable water pipes.

These types of improvements are typically more expensive than a normal repair and may require a substantial down payment. Nevertheless, the energy savings they provide can be well worth the expense. It is important to discuss these options with a certified public accountant. They can help you determine whether these expenses will be deductible and assist you in tracking your deductibles. Bonsai Tax offers a free tax app that scans your bank and credit card statements to uncover potential deductions. Users save an average of $5,600 with this tool. Sign up for a free trial here.