Rental expenses you can and can’t write off

Dear Tax Talk,
I have two questions about rental expenses. If I do repairs or maintenance work on my rental property that I own, can I write this off as an expense? If I purchase lawn equipment to maintain rental property that I own, can I write this off?
— Scott

Dear Scott,
While being a do-it-yourselfer will save you money, it won’t get you an added tax deduction for your time and effort when it comes to rental expenses. Of course, if you know how to do your own handy work, you’re probably better off saving the costs of a craftsman rather than increasing your deductions. For example, if a craftsman costs you $100, you’ll only save a fraction of that in income taxes, depending on your tax bracket. If you paid yourself the $100, then you would have income equal to that amount. Your result would be $100 of income and $100 of deduction, which nets to zero tax effect. That is why you can’t write off your time as a rental expense.

If the primary purpose of the lawn equipment is to care for the rental property lawn, then you could write off the cost of the equipment through depreciation. If you use the equipment to care for your own lawn as well, then you should make an allocation of the cost to the rental property and part to nondeductible personal expense.

To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Taxpayers should seek professional advice based on their particular circumstances.

Bankrate’s content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate’s Terms of Use.