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Is Home Security Tax Deductible?

When making improvements to your home, it is always prudent to investigate any special tax breaks for which you may be eligible. While installing a home security system can save you money on certain monthly expenses, as well as peace of mind when you are away, payments for the service are likely not tax deductible. But there are cost-saving benefits of installing a home security system

 

Benefits

• The benefits of installing a home security system are numerous. Aside from adding security and protecting your possessions and the safety of your family, a home security system offers certain fiscal benefits as well. For most homeowners, this comes in the form of reduced home insurance costs. Typically, this savings has been rendered as a reduction in the yearly or monthly premium. Other times, home insurance companies will waive the deductible in the case that your home was burglarized while your home security system was installed and activated.
Homeowners with security systems may also see a return on investment when selling their home. Depending on the neighborhood that the home is located in, prospective buyers may see a quality home security system as an attractive selling point.

 

Misconceptions

• While installing a home security system may seem like an expense that justifies a tax deduction, the Internal Revenue Service specifically defines payments toward security systems as not deductible for protection of personal property. On page 13 of Publication 529 from the IRS, entitled “Miscellaneous Deductions,” the list of nondeductible expenses clearly lists a “home security system.”

 

Function

• The notion that home security systems are tax deductible likely stems from the fact that security systems for businesses are, in fact, tax deductible. This is because they are considered an “ordinary and necessary” expense for doing business. For example, the owner of a convenience store in a high-crime area would certainly need to have a security system installed to remain viable and secure.

 

Considerations

• It can be argued that if you run a business from your home, a home security system can be considered a reasonable tax deduction. However, there are many other factors to consider when deducting expenses for a home office or business. For instance, you can only deduct the cost of securing the part of your home that is solely used for business. If you have an office from where you make personal investments on the stock market but also use for playing solitaire and recording music as a hobby, you will likely have difficulty deducting the costs of a security system. On the other hand, if you use the front room of your home as a storefront or display room, you can likely deduct the cost of a security system. In any case, you should discuss the matter with a tax professional before attempting to make the deduction.

 

Function

• To realize benefits from the installation of your home security system, it is best to consult a tax professional as well as your home insurance provider. Your accountant or tax professional will be able to advise you on which, if any, deductions you are eligible for. Meanwhile, your home insurance agent will be able to guide you through the steps needed to qualify for a lower rate on your home insurance policy. In most cases, sending in a certificate for your alarm system is the only step required. Be sure to ask your home security company to furnish this when they install the system. Also be sure to check with your municipal government to ensure that you have all the proper permits for your home security system to avoid incurring fines.

 

Article Source: Anton Busch @www.ehow.com