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Nail down repairs deduction

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in Small Business Tax,Small Business Tax Deduction Strategies

Do your business premises need a few minor repairs here or there?

Strategy: Complete the repairs before the end of the year. The cost of the repairs is currently deductible, so you can still offset your company’s 2017 tax bill.

On the other hand, “improvements,” as opposed to “repairs,” must be capitalized and written off via depreciation over several years. It’s important to know the main ins and outs of the rules.

Here’s the whole story: Normally, a business operation is required to capitalize and depreciate amounts paid to acquire, produce or improve tangible property. Conversely, current deductions are typically allowed for repairs and maintenance costs. But distinguishing between improvements and repairs often isn’t easy.

The IRS finalized regulations on these issues in 2014. Although the regs clarified certain situations, they also created new complexities. Fortunately, small business owners may be ...(register to read more)

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