We installed wood floors in 2018, but discovered a defect in the wood and had to replace the wood in Jan 2019. I feel that the repair/replacement of product is part of the original 2018 job. Is the 2019 paid repair expense appropriately accrued in 2018? Or should it actually be considered a 2019 expense. I'm trying to determine which year as I'm currently working on my taxes.
Can I accrue a 2019 repair expense for a 2018 job in 2018?
Answers
Let me add to my question. The initial flooring job was completed in November 2018, but estimates and securing new materials were done in December - early January 2019 before the "repair" was started at the end of January. Thus, we didn't have the full cost of the repair until January but knew we would have the liability in December. Additionally, we are taking the initial installer to court in hopes to recoup our additional costs to repair. So unsure on what we should or should not accrue.
Job Expenses and Miscellaneous Deductions subject to 2% floor. Miscellaneous deductions which exceed 2% of your AGI will be eliminated for the tax years 2018 through 2025. This includes deductions for unreimbursed employee expenses and tax preparation expenses.
Filed Under:
Accounting