Cost of Remodeling On 2018's Taxes?

[Miss A]

We are in the beginning process of taking one large bedroom of our 5 bedroom home and making it into 2 seperate rooms, 1 side will still be a bedroom and the other side will be a bathroom for the first floor of our home, which includes daycare use.

How exactly with this play into 2018 taxes? Is this considered an addition, or something else? And in what category should I be keeping all the records/receipts for this project? Just when I figure out a good system for my record keeping and tax prep something new comes into play and I feel like a fish out of water trying to figure it out.

[TomCopeland]

remodeling

We are in the beginning process of taking one large bedroom of our 5 bedroom home and making it into 2 seperate rooms, 1 side will still be a bedroom and the other side will be a bathroom for the first floor of our home, which includes daycare use.

How exactly with this play into 2018 taxes? Is this considered an addition, or something else? And in what category should I be keeping all the records/receipts for this project? Just when I figure out a good system for my record keeping and tax prep something new comes into play and I feel like a fish out of water trying to figure it out.

Since you are not added square footage to your home, this is remodeling, not a home addition. Therefore, assuming you will be using both remodeled rooms on a regular basis for your business, take the total cost, multiply it by your time-space % and deduct in one year. No depreciation! Keep all receipts associated with this work. Call it "repairs" on Form 8829.

[Miss A]

Since you are not added square footage to your home, this is remodeling, not a home addition. Therefore, assuming you will be using both remodeled rooms on a regular basis for your business, take the total cost, multiply it by your time-space % and deduct in one year. No depreciation! Keep all receipts associated with this work. Call it "repairs" on Form 8829.

Thank you Tom!