Home Improvement Tax Deductions
A lot of homeowners are living in one of their biggest tax deductions without even realizing it. This is especially true of people who have upgraded their house or done some remodeling project recently. There are actually lots of different ways you can use home improvements for tax deductions. Yes, you can often subtract the amount of interest you pay on your home loan or home equity loans, but there are also a multitude of home expenses and repairs you can use to lower your taxes if you meet certain requirements.
Many house improvements and home upgrades can be counted towards lowering your income if you meet some special requirements. Sometimes you need to run a business and meet clients in a part of your house to qualify for these credits, but there are other deductions you can use even if you don't work out of your home. The changes you make to your home may qualify for income tax deductions or credits depending upon the size of the project, the need for the home addition and your complete tax situation. Some people have heard about the new environmentally friendly tax credits, but you should consider some of the costs of other various home improvement projects too.
Tax deduction for lawn care - This is only one of the many possible deductions you can take if you really run your business from your home. A while ago tax courts ruled that if you operate your own business and meet customers regularly at your house you may be able to deduct some of your lawn care costs as a business expense because it makes your business more likely to succeed. You probably won't be able to deduct the entire amount, but rather, you would have to deduct a portion of the expense in proportion to how much your business and home share the same space.
Swimming pool tax deduction - Tax laws state that in some cases a part of the expenses to install a pool can be deducted from your taxes if there is a valid health-related reason to use a pool. In one case a gentleman with decreased breating capacity used a pool to exercise and increase his breathing strength. Since he used the pool more than his family he was allowed to deduct part of the expenses as a medical expense. You should also know that the IRS considers a swimming pool and a spa to be the same sort of medical device. Other medical devices for the house such as chair lifts for wheelchairs may also qualify for a deduction.
Tax credits for new doors - Select Energy Star entry doors that meet certain energy efficiency criteria are eligible for a tax credit of up to 30% of the cost of the door with a maximum tax credit of $1,500. If you're going to install new doors this year, make sure they meet the minimum requirements for this tax deduction.
If you are planning on finishing some home upgrades this year, you should really investigate the possible tax credits that may be available! Not all home improvements are eligible for tax deductions, but with a little planning you can almost surely save some cash on your federal taxes and upgrade your home at the same time. The rules for income taxes are always changing, so it might be beneficial to speak with a qualified tax expert about your home improvements to find out of you are eligible for any of these special credits. To be sure that you are counting everything you can, you should take copious notes, take plenty of photos and of course organize all your receipts for every possible home addition expense.
Still haven't done your taxes? You can often save a lot of money with just a few minutes of reading about your possible home improvement tax deductions. You don't need to hire home improvement contractors for these savings. Even if you're a DIY home improvement amateur, you can save lots of money on projects around your house.
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