Are Home Security Systems and Alarm Monitoring Tax Deductible?
Most savvy homeowners want to get every tax deduction they’re entitled to. Typically, though, a home security system does not qualify for a tax deduction. If your security system is only used to safeguard your personal property then it would fall under the Internal Revenue Service’s (IRS) list of nondeductible expenses.1
However, if you claim a home office or use your home for a business like a child care facility, you may also be able to claim a portion of your home security system.
In order to take advantage of the home office deduction, you must regularly and exclusively use the home office for business. If your home is used as a child daycare, then the portion of the house used doesn’t have to be exclusively devoted to the daycare—but there may be other requirements that need to be met in order to claim home security as a tax deduction.
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Understanding exclusive use
According to the IRS, if you “install a security system that protects all the doors and windows of your home, you can deduct the business part of the expenses you incur to maintain and monitor the system. You also can take a depreciation deduction for the part of the cost of the security system relating to the business use of your home.”2 The tricky part when claiming the deduction, however, is the rule about exclusive use.
In a best-case scenario, your home office would be in a separate room and would not be available to family members for other purposes. If you set aside a portion of a room for business use, there must be a clear division like a partition and you have to demonstrate that no personal activities occur in that space. In fact, if you allow your children to do homework in your office, that would constitute a violation of the exclusive use rule and your deduction could be disallowed.
Similarly, because alarm monitoring is usually part of a home security package, it falls under the same IRS guidelines when it comes to whether or not home alarm monitoring is tax deductible. As part of your overall home security strategy, any portion of the monitoring that qualifies for use by your home-based business or daycare would be eligible as a tax deduction.
Consult a tax professional
Let a pro handle the tax issues. Check out the IRS' directory of credentialed tax return preparers, or get help with tax software like Turbo Tax.
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Sources
- Department of the Treasury, Internal Revenue Service, "Publication 529, Miscellaneous Deductions," December 2020. Accessed May 10, 2022.
- Department of the Treasury, Internal Revenue Service, "Publication 587 (2021), Business Use of Your Home." Accessed May 10, 2022.
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