The average American homeowner spends around $9,000 a year on improvement projects. While taking on home improvement projects can be expensive, they are well worth the money. Not only can the right updates and renovations make a home more appealing, they can also add more value to the residence.
Before choosing a home remodeling project, you need to weigh a few factors. One of the main things to consider is whether or not the project you are considering provides any tax deductions. Figuring out what home improvements are tax deductible is essential when trying to properly plan these projects.
With these deductions, you can reduce the amount of taxes you have to pay at the end of the year. Working with an experienced accountant is the best way to ensure all of the deductions you qualify for are claimed. Read below for more information about which home improvement projects can help you receive tax deductions.
Making Your Home More Energy-Efficient
The monthly energy bill is one of the biggest expenses most homeowners have. Finding ways to reduce the amount of energy your home uses is not only a wise idea, it can also help you receive tax deductions. The Residential Renewable Tax Credit is just one of the programs that provide these deductions.
In order to get approved for this credit you will need to invest in a host of different solar technologies. Things like solar panels, water heaters and even small wind turbines can be used as tax deductions. If you are using eco-friendly technology to improve a commercial building, you may even be able to apply for and get a capital allowance claim.
Instead of trying to handle the filing of this claim on your own, you need to work with seasoned tax professionals. With their assistance, this process will be much easier and more successful.
Medical Care Home Improvements
One of the biggest concerns people have as they get older is staying in the home they love. As a person’s joints and bones start to deteriorate, doing things like climbing stairs can become very painful and dangerous. This is why finding upgrades to make aging in place easier is a good idea.
Getting help from your primary care doctor is essential when trying to get tax deductions for your medical equipment and other related expenses. There are a host of medical deductions that are considered fully tax-deductible and they include things like:
- Installing or modifying fire alarms and smoke detectors
- Constructing entrance and exit ramps
- Investing in support bars for your bathroom
- Hiring professionals to widen doorways and hallways
Before making these alterations to your home, be sure to consult with construction professionals. They can help you devise a plan of action to ensure the work is done the right way.
Projects That Increase Your Home’s Resale Value
The key to turning a profit when selling a home is adding the right upgrades over the years. With the right improvements, you can increase the value of your home substantially. Most homeowners fail to realize that upgrades that increase the value of their homes can be tax-deductible.
The main thing you need to do when attempting to get approved for these deductions is to itemize. Showing the IRS where the money invested in a home improvement project was spent can increase your chance of receiving deductions.
In most cases, projects like the addition of a swimming pool or finishing a basement can be tax-deductible. Other projects like new bathrooms and upgraded furnaces can also help you get a tax credit.
Find Ways to Improve Your Home Office
Nearly 43 percent of Americans work from home. If you are one of these workers, having a well-appointed and organized home office is crucial to your success. While home office deductions did go away for the most part in 2018, updates to your existing home office are still considered tax-deductible.
Choosing the right way to alter your existing home office will not be easy. Instead of trying to figure this information out on your own, you need to work with experienced professionals.
Allowing a construction company to come in and take a look at your existing home office is just the first step. Once they have inspected the office, they can provide you with advice on what needs to be changed to optimize this area and make it more appealing.
Rental Property Improvements
Finding the right investments is an essential part of building wealth. Investing in residential rental properties is a great way to generate a steady revenue stream. As time goes by, these properties will need to be upgraded.
The upgrades made to a rental property are generally tax-deductible. The IRS considers any maintenance or upgrades that make your rental property habitable for tenants as fully deductible. Not only will these upgrades make your tenants happy, they will also save you money in the long run.
DIY Renovations May Not Work Out
Some home and property owners think they can save a few dollars by performing renovation projects on their own. In most cases, this DIY approach to home improvements will lead to a lot of mistakes being made.
The best way to avoid these mistakes is by working with the right construction company. Taking a look at a company’s previous work is the best way to get a feel for their skill level. With this information, hiring the right professionals will be a breeze.
Now That You Know What Home Improvements Are Tax Deductible
What homeowner wouldn’t jump at the chance to make their residence more appealing? Now that you know what home improvements are tax deductible, it is time to take action. With a solid game plan, getting the improvements done in a hurry will be simple.
Are you looking for more advice on owning and maintaining a home? If so, be sure to check out the rest of the blogs on our website.