Tax season is a time when every deduction counts, and if you’ve had plumbing work done recently, you might be wondering if any of those expenses are tax-deductible. While plumbing repairs and upgrades are often necessary, they don’t always qualify as deductions. However, there are some cases where you may be able to claim certain plumbing expenses.
Home Repairs vs. Home Improvements
The IRS differentiates between home repairs and home improvements, which impacts whether an expense is deductible.
- Home Repairs: Fixing a leaking pipe, replacing a broken water heater, or unclogging a drain is considered a maintenance expense. These costs typically don’t qualify for deductions on your personal residence.
- Home Improvements: Installing a new plumbing system, adding a bathroom, renovating your kitchen, or upgrading to energy-efficient fixtures may increase the value of your home. While not immediately deductible, these costs can be factored into your home’s adjusted basis, potentially reducing capital gains taxes when you sell.
Rental Properties and Business Deductions
If you own a rental property, plumbing expenses are treated differently. The IRS allows you to deduct necessary repairs and maintenance costs, including plumbing services, in the year they were performed. Upgrades or improvements, on the other hand, must be depreciated over time.
For those who run a home-based business, a portion of your plumbing expenses may be deductible if the work was performed in the part of your home used exclusively for business. Consulting a tax professional can help clarify what qualifies.
Energy-Efficient Plumbing Upgrades
Certain plumbing upgrades, such as installing energy-efficient water heaters or water-saving fixtures, may qualify for tax credits or rebates. Federal and state programs sometimes offer incentives for eco-friendly home improvements, reducing your overall costs. Checking with local utility providers and government programs can help you identify potential savings.
Keeping Track of Your Expenses
Proper documentation is key if you plan to claim any plumbing-related deductions. Keep receipts, invoices, and records of the work performed. If you’re unsure whether a specific expense is deductible, a tax professional can provide guidance based on your situation.
Need Professional Plumbing Services?
Always consult a tax professional for full guidance on deductions, credits, and other essentials. But if you’re planning plumbing repairs or upgrades, our team at Able Plumbing Solutions, LLC is here to help. We provide expert plumbing solutions to keep your home running smoothly. Contact us today to schedule a service!
