Can I deduct my handyman services from my taxes?
October 7, 2023 | 40,00 EUR | answered by Wolfgang Lenzner
Dear tax advisor,
My name is Andreas Wagner and I have a question regarding my tax return. Last year, I had some construction work done in my house to carry out renovation projects. This included the installation of a new heating system, repair of the roof, and renovation of the bathroom. These works have cost me a considerable amount, and therefore I am wondering if I can deduct the costs on my taxes.
I have always done my tax return by myself, and I am unsure if I can claim the construction work as household services. I am afraid of making mistakes, so I would like to know if and how I can report the costs of the construction work in my tax return.
Are there specific requirements that need to be met in order for me to deduct the construction work on my taxes? What documents do I need to provide and how do I need to document the costs? Is there a maximum amount that I can deduct, and how will this affect my tax liability?
I would greatly appreciate your help with this question. I want to make sure that I fill out my tax return correctly and avoid any errors. Thank you in advance for your assistance.
Best regards,
Andreas Wagner
Dear Mr. Wagner,
Thank you for your question regarding the tax deductibility of craftsman services in your tax return. It is understandable that you are unsure and do not want to make any mistakes. I will be happy to explain in detail how you can claim the costs for craftsman services.
In general, you can deduct craftsman services as part of household-related services for tax purposes. This includes renovation, maintenance, and modernization work in your own household. This includes the works you mentioned such as the installation of a new heating system, roof repair, and bathroom renovation.
In order to claim the craftsman services for tax purposes, you must meet certain requirements. The work must have been carried out in your own household and the payment must have been made by bank transfer or electronic payment method. Cash payments are not recognized. Additionally, you must keep the invoices for craftsman services and be able to present them to the tax office if necessary.
You can deduct the costs for household-related services up to a maximum of 20% of the labor costs, but a maximum of 4,000 euros per year. Labor costs, travel costs, machinery costs, and certain additional costs such as travel expenses are considered. However, material costs cannot be deducted.
The tax impact of deducting craftsman services is that you can reduce your tax burden. The deductible costs reduce your taxable income and therefore also your tax liability. This can help you save taxes at the end of the year.
In summary, you can include the costs for craftsman services in your tax return as household-related services, provided you meet the mentioned requirements. Therefore, keep all relevant documents in order to be able to prove to the tax office that the costs were actually incurred in case of any queries.
I hope that this information was helpful to you. If you have any further questions, please feel free to contact me.
Best regards,
Wolfgang Lenzner
