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Daycare and Taxes All things related to Taxes and running a Daycare post here. Topics of tax exemptions, forms, filings, tax write offs, IRS etc.

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Old 01-22-2019, 09:12 AM
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bzzzybee bzzzybee is offline
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Default Question for Tom

In April of 2018 we had to replace our A/C unit which cost over $8,000. How do I write this off as a deduction for my expenses? I know I canít take 100% as a deduction, but is this considered a home repair or something I need to depreciate? Or something totally different?
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Old 01-23-2019, 09:41 AM
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TomCopeland TomCopeland is offline
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Default A/C unit

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Originally Posted by bzzzybee View Post
In April of 2018 we had to replace our A/C unit which cost over $8,000. How do I write this off as a deduction for my expenses? I know I canít take 100% as a deduction, but is this considered a home repair or something I need to depreciate? Or something totally different?
This would be a home improvement you must depreciate over 39 years, using your time-space%. If the purchase price of your home was above $400,000 you may be eligible for the Safe Harbor for Small Taxpayers rule. See my article on this: http://tomcopelandblog.com/when-can-...ed-in-one-year
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Old 01-23-2019, 11:50 AM
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Originally Posted by TomCopeland View Post
This would be a home improvement you must depreciate over 39 years, using your time-space%. If the purchase price of your home was above $400,000 you may be eligible for the Safe Harbor for Small Taxpayers rule. See my article on this: http://tomcopelandblog.com/when-can-...ed-in-one-year
Hi Tom!

So I had asked earlier last year (Jan 2018) about the HVAC we had put on our house and your response to me was the following:

"The rules changed in 2018. Take the total cost of the HVAC and multiply by your time-space %. Then deduct this amount on your 2018 taxes. In 2018 there is a 100% bonus depreciation rule that says everything you buy (except for a home and addition to your home) can be deducted in one year, and doesn't have to be depreciated. This is a big deal! "

Now I'm afraid I have done the wrong thing on my taxes. Which way was I supposed to handle this? TIA!
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Old 01-24-2019, 09:02 AM
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TomCopeland TomCopeland is offline
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Default Hvac

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Originally Posted by Lovisa View Post
Hi Tom!

So I had asked earlier last year (Jan 2018) about the HVAC we had put on our house and your response to me was the following:

"The rules changed in 2018. Take the total cost of the HVAC and multiply by your time-space %. Then deduct this amount on your 2018 taxes. In 2018 there is a 100% bonus depreciation rule that says everything you buy (except for a home and addition to your home) can be deducted in one year, and doesn't have to be depreciated. This is a big deal! "

Now I'm afraid I have done the wrong thing on my taxes. Which way was I supposed to handle this? TIA!
Sorry for the confusion. There was some confusion about whether home improvements done in 2018 could be deducted in one year. Some said yes, some said no. After further research I revised my thinking and now conclude that a home improvement is not eligible for the 100% bonus rule and must be depreciated over 39 years.
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