Deducting My Labor


Today TaxMama® hears from Kevin with an idea others have had. “Recently our investment property is actually turning into a little bit of income property. If I hire out a job to be done, I usually write off the expense, including labor. If I do the work myself, is there any way that I can write off my own labor?”  

Ask TaxMama

 Dear Kevin,  

No. Sorry.  

When you write off the expenses for labor, it’s because you pay someone to do it.

You can only claim deductions for money you spend. The only way to write off your own labor?  

1) Invoice the property.

2) Pay the bill.

3) Pick up the income as self-employment income and pay income taxes and self-employment taxes on that income. (Schedule C)

4) Deduct the bill on Schedule E, without getting the benefit of reducing your self-employment income.  

Uh…is that really where you want to go?  

You do save a bunch of money doing the work yourself. But are you missing out on important (or even enjoyable) experiences with your wife? I often wish my husband would hire out some of the handyman work, too. (But, since he doesn’t, that leaves me more time to work….)

And remember, you can find answers to all kinds of questions about the value of your own labor, and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!] 

Please post all Comments and Replies in the new TaxQuips Forum .

Leave a Reply