Daycare.com Forum
Daycare and Taxes>Home Improvements
MarinaVanessa 11:46 AM 12-27-2011
We've done several home improvement projects to our home this year including regrouting our tile, remodeling our kitchen and replacing all of our windows. I know that these projects are tax deductible but how do I claim them on the scchedule C if we did the work ourselves?
Do I claim the supplies and materials and if I do under what category do I put them under? I know that if I were to have paid a contractor or company to do the work it would all go under Home Improvment. Is it the same if we did the work ourselves?
I use Minute Menu Pro and when I go under the Home Improvement category it asks me "Value as of date placed in service", what in the world does that mean
. Do I have to put something there or can I just enter our receipts for the supplies of these projects in the way I do the rest of the receipts and claim the time/space% or do I have to add up all of my receipts by projects and claim depreciation for the entire project?
If i do claim depreciation is it the 39 year straight line?
In minute menu it asks for convention: (mid-month or other). What is this and which do I use?
This is the first time that I had to claim large home improvement prpojects. I'm sooo confused
Do I claim the supplies and materials and if I do under what category do I put them under? I know that if I were to have paid a contractor or company to do the work it would all go under Home Improvment. Is it the same if we did the work ourselves?
I use Minute Menu Pro and when I go under the Home Improvement category it asks me "Value as of date placed in service", what in the world does that mean
. Do I have to put something there or can I just enter our receipts for the supplies of these projects in the way I do the rest of the receipts and claim the time/space% or do I have to add up all of my receipts by projects and claim depreciation for the entire project?If i do claim depreciation is it the 39 year straight line?
In minute menu it asks for convention: (mid-month or other). What is this and which do I use?
This is the first time that I had to claim large home improvement prpojects. I'm sooo confused
TomCopeland 02:33 PM 12-27-2011
A home improvement is something that increases the value of your home and must be depreciated over 39 years. A repair is something that helps maintain the value of your home and is deducted in one year.
Regrouting tile is a repair. Remodeling a kitchen and replacing all windows is a home improvement. However, if a repair is done as part of a larger remodeling project, it should be treated as a home improvement. So, if you are regrouting tile in your kitchen as part of the kitchen remodel, this would now be a home improvement.
When you do home improvements yourself, count the cost of the supplies and materials you bought to determine the amount you are depreciating. You can't count the value of your labor.
When entering this into MM, put the date the home improvement was completed, as the date it was placed in service. The "value as of date placed in service" means the entire cost of the project. Add up all receipts and treat it as one item (kitchen remodeling). Multiply by your t/s% and then depreciate over 39 years (straight line).
Use the mid-month convention. This means that for home improvements you get a half a month of depreciation for the month the project was completed, and then the rest of the depreciation you get is based on the number of months left in the year after the project was completed.
For details on depreciation, see my 2011 Family Child Care Tax Workbook and Organizer.
Regrouting tile is a repair. Remodeling a kitchen and replacing all windows is a home improvement. However, if a repair is done as part of a larger remodeling project, it should be treated as a home improvement. So, if you are regrouting tile in your kitchen as part of the kitchen remodel, this would now be a home improvement.
When you do home improvements yourself, count the cost of the supplies and materials you bought to determine the amount you are depreciating. You can't count the value of your labor.
When entering this into MM, put the date the home improvement was completed, as the date it was placed in service. The "value as of date placed in service" means the entire cost of the project. Add up all receipts and treat it as one item (kitchen remodeling). Multiply by your t/s% and then depreciate over 39 years (straight line).
Use the mid-month convention. This means that for home improvements you get a half a month of depreciation for the month the project was completed, and then the rest of the depreciation you get is based on the number of months left in the year after the project was completed.
For details on depreciation, see my 2011 Family Child Care Tax Workbook and Organizer.
MarinaVanessa 03:06 PM 12-27-2011
Originally Posted by TomCopeland:
A home improvement is something that increases the value of your home and must be depreciated over 39 years. A repair is something that helps maintain the value of your home and is deducted in one year.
Regrouting tile is a repair. Remodeling a kitchen and replacing all windows is a home improvement. However, if a repair is done as part of a larger remodeling project, it should be treated as a home improvement. So, if you are regrouting tile in your kitchen as part of the kitchen remodel, this would now be a home improvement.
When you do home improvements yourself, count the cost of the supplies and materials you bought to determine the amount you are depreciating. You can't count the value of your labor.
When entering this into MM, put the date the home improvement was completed, as the date it was placed in service. The "value as of date placed in service" means the entire cost of the project. Add up all receipts and treat it as one item (kitchen remodeling). Multiply by your t/s% and then depreciate over 39 years (straight line).
Use the mid-month convention. This means that for home improvements you get a half a month of depreciation for the month the project was completed, and then the rest of the depreciation you get is based on the number of months left in the year after the project was completed.
For details on depreciation, see my 2011 Family Child Care Tax Workbook and Organizer.
Wow, thanks Tom. That totally explains it. And I can't wait for the tax webinar A home improvement is something that increases the value of your home and must be depreciated over 39 years. A repair is something that helps maintain the value of your home and is deducted in one year.
Regrouting tile is a repair. Remodeling a kitchen and replacing all windows is a home improvement. However, if a repair is done as part of a larger remodeling project, it should be treated as a home improvement. So, if you are regrouting tile in your kitchen as part of the kitchen remodel, this would now be a home improvement.
When you do home improvements yourself, count the cost of the supplies and materials you bought to determine the amount you are depreciating. You can't count the value of your labor.
When entering this into MM, put the date the home improvement was completed, as the date it was placed in service. The "value as of date placed in service" means the entire cost of the project. Add up all receipts and treat it as one item (kitchen remodeling). Multiply by your t/s% and then depreciate over 39 years (straight line).
Use the mid-month convention. This means that for home improvements you get a half a month of depreciation for the month the project was completed, and then the rest of the depreciation you get is based on the number of months left in the year after the project was completed.
For details on depreciation, see my 2011 Family Child Care Tax Workbook and Organizer.
WImom 12:14 PM 12-28-2011
To go off of Marina - We also did some projects and thank you for answering this question as I had it too. I also wondered about out labor. I have been entering it under my time outside of childcare. So if I worked on our remodel for 8 hours saturday I put 8 hours down for that day in MM under Time-Other Activities. Is this correct for me to do? (ours was spent putting up a new fenced in area for the childcare - 100% business and kitchen remodeling which was T/S)
TomCopeland 04:26 PM 12-28-2011
Hours spent on a 100% business activity, such as putting up a fence used only by your business can be counted as part of your time-space %. I don't think you should count any of the hours spent remodeling your kitchen, because you would still be doing the remodeling work even if you weren't in business. In the same way, you shouldn't count hours spent on general house cleaning - count only hours spent on extra hours cleaning solely because of the business.
WImom 12:47 PM 12-30-2011
Thanks! That makes sense!