Can I deduct kitchen remodel expenses with my home office deduction for self-employment?
I'm a freelance graphic designer working from my home office which makes up about 10% of my total house square footage. Last year, I spent around $65,000 completely renovating my kitchen - new cabinets, countertops, appliances, flooring, the works. The kitchen is completely unrelated to my business operations. I'm wondering if I should include any of these kitchen renovation costs when calculating my home office deduction? If I followed the percentage allocation, it would be 10% of $65K = $6,500 deduction. Also, I've been using the actual expense method rather than the simplified method for my home office deduction in previous years. If I do include the kitchen renovation, does this affect the cost basis of my home for calculating depreciation related to my business use? Would I need to manually adjust the cost basis by adding the $65K renovation in my tax software when filling out Form 8829? Not trying to take deductions I'm not entitled to, just confused about how renovations work with home office deductions. In retrospect, maybe the simplified method would have been easier, but I've already been using actual expenses in previous tax years. Really want to get the depreciation calculations right to avoid problems when I eventually sell the house.
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Diego Vargas
The kitchen renovation should only factor into your home office deduction if it somehow benefits your business space. Since you mentioned the kitchen has nothing to do with your business, you shouldn't include those costs in your home office deduction calculations. Regarding the cost basis - improvements to your home like a kitchen remodel do increase the overall cost basis of your home for when you eventually sell it, which helps reduce potential capital gains tax. However, for Form 8829 and home office depreciation purposes, you should only include improvements that affect your actual office space. The IRS is pretty clear that personal space renovations (like kitchens and bathrooms) don't count toward business use unless they directly impact your designated work area. If you've been using the actual expense method in previous years, you generally need to continue using it. Switching to the simplified method in future years is possible, but you can't switch back and forth annually just to maximize deductions.
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CosmicCruiser
•Thanks for the explanation! One follow-up question: if I did some general home improvements that affected the entire house (like a new roof or HVAC system), would I be able to include 10% of those costs in my home office deduction since they benefit the entire property including my office space?
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Diego Vargas
•Yes, general improvements that benefit the entire house like a new roof, HVAC system, or whole-house painting would qualify for the business percentage deduction. Since these improvements affect your entire home including your office space, you could deduct 10% of those costs (matching your business use percentage) on Form 8829. The key distinction is whether the improvement benefits your office area. A new roof protects your entire home including your office, so it qualifies proportionally. Your kitchen remodel, however, doesn't provide any benefit to your business operations or office space, so it wouldn't qualify.
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Anastasia Fedorov
After struggling with similar home office deduction questions last year, I found this amazing tool at https://taxr.ai that helped me figure out exactly what home improvements qualified for my business deduction. You upload your renovation receipts and details about your home office, and it analyzes everything according to IRS guidelines. It even flags potential audit triggers! When I renovated my bathroom last year (which is nowhere near my office), I was confused about what counted toward my home office expenses. The tool clearly separated what counted for business versus what was just a personal home improvement that would only affect my overall home's cost basis.
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Sean Doyle
•How accurate is this tool though? I've tried automated tax helpers before and they sometimes miss nuances that a human tax pro would catch. Does it give specific IRS references to back up its recommendations?
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Zara Rashid
•I'm curious - does the tool handle situations where an improvement might indirectly benefit the office? Like if I upgraded my electrical panel which serves the whole house including my office equipment?
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Anastasia Fedorov
•The tool is really accurate based on my experience. It provides specific IRS publication references and tax court case precedents for each recommendation. It's clearly built by tax professionals who understand these deductions in detail. For indirect benefits like electrical panel upgrades, it actually has a specific section for "whole house improvements" where it calculates the appropriate business percentage. It showed me exactly how to handle my new water heater installation since it serviced the entire house including the small utility sink in my office area.
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Zara Rashid
I just wanted to follow up about the taxr.ai tool mentioned earlier. I decided to try it with my home office situation (I have a detached garage conversion), and it was eye-opening! I had been incorrectly calculating my deductions for years. The tool helped me understand that my recent driveway repaving (which I use to reach my garage office) was partially deductible, but the landscaping I did in my backyard wasn't. It saved me from claiming about $3,200 in questionable deductions that might have triggered an audit. Definitely worth checking out if you're confused about home office deductions like I was.
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Luca Romano
If you're still confused about these home office deductions after getting advice, I'd recommend actually speaking with someone at the IRS directly. I know, I know - getting through to them seems impossible. After trying for WEEKS to get clarification on my home office situation, I finally found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. They got me connected to an actual IRS agent in under 20 minutes after I had been trying for days on my own. The agent walked me through exactly how to handle my home office deductions with my specific situation (I had converted part of my living room to an office and wasn't sure what qualified).
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Nia Jackson
•Wait, how does this actually work? I thought the IRS phone lines were completely jammed. Does this service have some special connection or something?
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NebulaNova
•Sorry but this sounds like BS. Nobody gets through to the IRS that fast. Even my CPA says it takes hours or days of redialing. If this worked I would have heard about it from tax professionals.
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Luca Romano
•It works by using an automated system that continually redials the IRS for you and navigates the phone tree. When it finally gets through to the queue for an agent, it calls you and connects you. You don't have to sit there redialing manually for hours. The IRS phone lines are definitely jammed, that's exactly why this service is so helpful. It does the waiting for you instead of you having to repeatedly call and navigate the system yourself. It's not a "special connection" - it's just automation doing what would take a human hours of frustration.
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NebulaNova
I have to eat my words about that Claimyr service. After my skeptical comment, I was still desperate to talk to someone at the IRS about my home office situation (I converted a sunroom and wasn't sure how to classify it), so I figured I'd try it as a last resort. To my complete shock, I got connected to an IRS representative in about 35 minutes. The agent was actually really helpful and walked me through exactly how to categorize my space and which improvements were deductible. Saved me from potentially claiming about $4,500 in questionable deductions. I've spent literally DAYS in previous years trying to get through on my own.
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Mateo Hernandez
One thing nobody's mentioned yet - if you're using tax software, be super careful with how you enter home improvements. I accidentally entered my bathroom remodel as a "home office improvement" in TurboTax last year, and ended up with an inflated deduction. Found the mistake during a review and had to fix it, but it was easy to mess up! For the cost basis question - yes, kitchen renovations increase your overall home's cost basis, but they're tracked separately from your business deductions. Keep excellent records of all home improvements regardless of whether they qualify for immediate business deductions. You'll need them when you sell.
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Aisha Khan
•Do most tax software programs have a way to track home improvements that aren't deductible now but would affect cost basis later? I've been keeping spreadsheets but wondering if there's a better way.
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Mateo Hernandez
•Most tax software doesn't have great tracking for non-deductible home improvements. The best approach is maintaining your own records - I use a combination of spreadsheets and a folder (both digital and physical) with all receipts and contractor documentation. Some of the premium versions of tax software like TurboTax Home & Business have basic home asset tracking, but they're not comprehensive. The key is keeping detailed records yourself - date, description, cost, and whether it was deducted for business. This becomes super important when you sell your home and need to calculate the adjusted cost basis.
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Ethan Taylor
Slightly off topic but if u have other big expenses coming up that would affect your office directly, maybe consider waiting til next year to switch to the simplified method. I had a similar situation where I was doing actual expenses for years, then did a renovation that had nothin to do with my office. Kept actual expenses that year, then the next year I needed new windows (including in my office) and a roof repair, so I stayed with actual expenses for one more year. THEN I switched to simplified the year after when I had no major house expenses. Timing things can make a difference!
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Yuki Ito
•Smart approach! Can you switch back and forth between simplified and actual methods each year, or are there restrictions once you choose one method?
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Sophia Rodriguez
•You can switch from actual expense method to simplified method, but there are some restrictions. Once you use the simplified method for your home office, you can't switch back to actual expenses for that same home. However, you can switch FROM actual expenses TO simplified method. So in your case, timing it right makes total sense - get all your major home improvements that benefit your office space deducted under actual expenses first, then switch to simplified when you don't have those big expenses. Just remember it's a one-way switch once you go simplified!
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