Deducting Improvements vs. Repairs on Your Taxes


“Example of How to Deduct an Improvement

You made an improvement worth $5,000 to your property. Therefore, you must deduct it over a set depreciation schedule. We will use a depreciation schedule of 10 years.

We will assume there is no salvage value, meaning it will be worth nothing after the 10 years. We will also assume straight-line depreciation, meaning the cost will be spread out evenly over the 10 years.

Therefore, you can claim ($5,000/10) an expense of $500 each year for the next 10 years. Assuming you are at a 28 percent tax rate, you will save ($500*.28) $140 in taxes for the year.”

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  • 6 months ago by vince