How to Deduct a Deck

New tax rules have eliminated the need to depreciate just about everything you might purchase for your family child care business.

But, how does purchasing a new deck fall under these new rules?

If you repair an existing deck or build one that the children in your family child care use, you can deduct part of the cost as a business expense.

If the new deck costs less than $2,500 you can deduct it in one year. Multiply the cost by your Time-Space percentage.

If you are simply repairing the deck (painting, staining, replacing some boards, etc.) then you can deduct the cost of the repairs in one year, regardless of the cost. Multiply the cost by your Time-Space percentage.

If the new deck costs more than $2,500 then you must treat it as a home improvement and depreciate it over 39 years.

The new tax rules say that anything costing more than $2,500 can be deducted in one year, with the exception of a home, a home improvement and a home addition.

One exception

If the cost of the deck, any other home improvements or repairs in one year are less than the lessor of $10,000 or 2% of the purchase price of your home, you can deduct the business portion of the deck under the Safe Harbor for Small Taxpayers rule.

Tom Copeland - www.tomcopelandblog.com

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