The average person thinks that if they make repairs to their home, they are in essence improving their home; they view home repairs and home improvements as one and the same. The IRS, however, makes a distinction between the two. So the short answer is that unless you use your basement as a home office for your business or you are renting part of your home to another person, you will not get a federal tax deduction for repairs.
This doesn’t mean you are completely out of luck. If the repairs are major enough to affect the value of the home, you might be able to claim them as home improvements — for which you may receive a tax deduction.
The Differences Between Home Repair and Home Improvement
Your local home improvement store doesn’t care what you use its products for, but the IRS does. In terms of tax deductions, a home repair is something done to maintain the house but doesn’t make a huge difference in terms of livability or resale value. Examples of what the IRS defines as repairs include fixing leaks in the roof or floors, small cracks in the foundation or basement walls, or gutters.
According to the IRS, home improvements include anything major that significantly boosts the home’s value. For example, replacing the entire roof or foundation qualifies as a home improvement. So if your foundation is so bad that it needs to be replaced, you may qualify for a tax deduction — but this also means your foundation is dangerously unstable.
Home Office Deduction
If you own a business and use part of your home to conduct that business, a percentage (sometimes 100 percent) of any repair to make that area habitable is tax deductible. In the case of foundation and basement repairs, you would need to have your working space in the basement. In every case of potential tax deductions, see if you qualify for the deductions before counting on them ahead of time and starting repairs that might not be covered.
Renting to Others
You’re in luck if you have a finished basement you are renting out to someone else. All repairs in the rented area are tax deductible, including repairs to the foundation and basement walls. However, this must be a legally rented area.
Acculevel Handles Major Repairs
Whether it’s small repairs to your basement home office walls or a major overhaul of your foundation, Acculevel has knowledgeable staff with the skills to repair and improve those spaces under the first floor. We can handle anything from small cracks in the foundation and bowed walls to lifting concrete slab foundations. Family owned since 1978, we believe in giving honest estimates and never charge for unnecessary services. If you live in the Midwest and have basement or foundation issues, give us a call at (866) 669-3349 or email us at [email protected].