Can I deduct tools here?

Usually, small tools go under 'Supplies' (Line 22). But if you bought parts to fix a machine, the parts go here under Repairs.

What about car repairs?

No. Car repairs are part of 'Vehicle Expenses' (Line 9). If you take the Standard Mileage Rate, you cannot deduct repairs separately.

Can I deduct a new roof?

No. A new roof is an improvement that adds value and extends the life of the building. It must be capitalized and depreciated over 39 years (commercial) or 27.5 years (residential rental). However, a cost segregation study may reclassify portions of the roof into shorter-lived categories.

Interior painting is generally a repair — it restores the property to its existing condition. Painting as part of a major renovation or addition, however, may need to be capitalized as part of the improvement.

Is pressure washing deductible?

Yes. Pressure washing sidewalks, siding, or parking areas is routine maintenance that keeps property in working condition. It's a fully deductible repair expense on Line 21.

What records do I need for repairs?

Keep receipts showing the date, vendor, amount, and description of work. Photos of before/after conditions strengthen your position if the IRS questions whether the expense was a repair or improvement.

Schedule C · Line 21

Repairs & Maintenance

Broken window? Leaky pipe? If it's maintenance, it's deductible. If it's an upgrade, it's an asset.

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A guide by Taxstra Tax & Accounting — CPA-led tax strategy for business owners

Your Guide

01Repair vs. Improvement 02Worked Example 03De Minimis Safe Harbor 04The BAR Test 05Common Mistakes 06Frequently Asked Questions

Quick Answer

Line 21 covers repairs and maintenance — costs to keep your business property in ordinary working condition without adding value or extending its useful life. Fixing a broken window, patching a leak, or replacing a worn belt on equipment are repairs (deductible now). Adding a new room, replacing an entire HVAC system, or installing a new roof are improvements (capitalized and depreciated over time).

Repair vs. Improvement

You can deduct the cost of repairs and maintenance that keep your property in a normal, efficient operating condition. The IRS tests whether an expense merely maintains or actually improves.

Repair (Expense — Deduct Now)

Restores to original condition.
Does not add value.
Does not prolong life.
Fixing a broken window, patching a leak, repainting faded walls.

Improvement (Asset — Depreciate)

Adapts to new use.
Materially increases value.
Extends useful life > 1 year.
New roof, new HVAC system, adding a room.

Worked Example

A plumber's repairs vs. improvements

Deduct Immediately (Line 21)

Van brake replacement: $3,200 (repair to restore function)
Equipment replacement parts: $1,400 (worn-out belt, motor)
Office plumbing repair: $3,600 (fixing burst pipe, not upgrading system)

Total Line 21: $8,200

Capitalize & Depreciate (Not Line 21)

New engine for van: $12,000 (improvement, not repair)
Why? Extends useful life of van beyond original; materially adds value
Tax treatment: Depreciate over 5 years (Section 179 may apply)

Annual deduction via depreciation: ~$2,400/yr

De Minimis Safe Harbor

Taxstra CPA Tip

Normally, any asset that lasts longer than a year must be depreciated. However, the IRS allows you to make an annual election to expense immediately any item that costs less than $2,500 per invoice or item. You must attach a "Section 1.263(a)-1(f) De Minimis Safe Harbor Election" statement to your return — most tax software handles this automatically.

The Limit

$2,500

Per Invoice or Item

The Requirement

Annual Election

Must attach statement to return

The Benefit

Total Deduction

Skip depreciation schedules

The BAR Test

When to capitalize expenses over $2,500

If an expense is over $2,500, you must capitalize it if it falls into one of these three categories:

B — Betterment

Does it ameliorate a material condition or defect? Does it materially add to the quality or size?
Ex: Adding a second story to a building.

A — Adaptation

Does it adapt the property to a new or different use?
Ex: Converting a garage into a retail showroom.

R — Restoration

Does it restore a major component to "like-new" condition after falling into disrepair?
Ex: Replacing the entire HVAC system.

Common Mistakes

Watch Out

Renovating your kitchen is NOT a business expense, even if you sometimes work at the kitchen island.

Even for Home Office Deductions (Line 30), "Direct" repairs (fixing the office window) are deductible, but "Indirect" repairs (fixing the home's roof) are only partially deductible on Form 8829. Do NOT list them here on Line 21.

Frequently Asked Questions

A REPAIR keeps property in good working condition (fixing a leak). An IMPROVEMENT adds value or prolongs its life (replacing the whole roof). Repairs are deductible now; Improvements are depreciated over time.

Back to Schedule C Hub · See also Line 13: Depreciation

Not Sure If It's a Repair or Improvement?

The repair/capitalization rules are surprisingly nuanced. A Taxstra CPA can review your books and make sure you're not leaving deductions on the table.

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Disclaimer: This content is educational and does not constitute individualized tax advice. Tax rules change; verify all figures with a qualified CPA before filing. For personalized guidance, book a consultation.