If you are in the process of renovating your home, you should keep a few things in mind before you begin. Although home repairs are necessary to keep your house operating properly, they are not tax deductible. However, if you are renovating your house for medical reasons, you may be able to claim a tax credit for the cost.
Energy-efficient renovations
Energy-efficient home repairs and renovations can qualify for tax breaks. These include installing energy-efficient windows, doors, skylights, insulation, air-source heat pumps, central air conditioning, and circulating fans. The cost of these upgrades may be up to $500 or more, but the credit can help you avoid high utility bills.
While it’s possible to get a tax credit for making energy-efficient home improvements, the federal tax code is currently limited in the amount of money that can be claimed as a tax deduction. For instance, an energy-efficient renovation can earn a homeowner a $200 tax credit. This tax credit reduces the amount of federal taxes the homeowner owes, and in many cases, increases the refund they receive.
Home improvements made for medical reasons are also tax-deductible. These improvements can include making your home more accessible for a handicapped person. Some of these improvements may be simple such as installing a ramp or installing railings. However, if the improvement is more complicated, you should itemize your expenses.
Medically-based improvements
Medically-based improvements are eligible for deductions on your home taxes. These improvements can be anything from lowering cabinets for handicapped persons to grading the lawn to make it more accessible for wheelchairs. The key is to be sure that the improvements are necessary and reasonable for your medical needs. If the improvements do not increase the value of your home, you cannot claim them. The deduction is limited to 10% of your AGI, however. For taxpayers 65 and older, that threshold drops to 7.5%.
Medically-based improvements are generally not deductible on a general basis, but they can qualify as medical expenses. The improvements must have a medical purpose, rather than aesthetic or architectural purposes. They can also increase the value of your home. You can also take medical deductions for home improvements made for medical reasons, such as installing handicapped-accessible ramps or widening doorways.
Regardless of whether you decide to claim home improvements as medical expenses, you should know that these expenses are not deductible when you sell your home. But you can still claim a medical expense deduction for medically-related home improvements if you have documentation. For example, if you install a new hot tub in your home, you can claim a medical deduction of up to $1,000. However, you should keep in mind that the medical expense deduction does not apply to the price of installing the hot tub.
Landscaping to boost curb appeal
There are many ways to improve the curb appeal of your home. One way is to add a fence. This can help keep pets and children from getting out of your yard. You can use wood, metal, or vinyl fences. Before choosing a material, consider the climate and durability of your area. Also, check with your local government for regulations.
A home’s curb appeal is often the first impression a buyer has of your property. If it does not have a good appearance, it might not be the best choice for them. Regardless of whether you’re selling a home or living in it for yourself, a nice exterior can increase its value and salability.
Keeping your yard clean is another way to improve curb appeal. A beautiful yard will show the world that you take care of your property. A clean lawn and a well-kept garden will make your house stand out. Likewise, make sure to rake lawn debris and keep your driveway free of weeds. You can also hire a professional tree trimmer if needed. A unkempt yard will only detract from the value of a home of any price range.
Office alterations
You can write off office alterations for part of your expenses this year, but you have to keep track of the actual costs. You can deduct a portion of your expenses if they benefit your business. The percentage of your home you use for your business determines how much you can write off.
There are two types of office alterations that are deductible. One is a repair that impacts the space directly. The other kind is an improvement that benefits the entire home. For example, if you fix a roof or install a new heating and cooling system, you can deduct these expenses.
Office alterations that increase the value of your home are considered capital improvements. Regular homeowners cannot deduct ordinary repairs, but they can deduct capital improvements.