If you need to make repairs to your home for any reason, you may want to take advantage of the fact that some repairs are tax deductible. However, be sure to consult with a tax professional before making any decisions.
Home office repairs are tax deductible
If you operate as a home-based business, you can deduct your home office repairs and maintenance costs as business expenses. However, you need to make sure your home meets certain standards to qualify.
Among the requirements, your home must be a place where your business activities are performed on a regular basis. It can be part of your primary home or a rental home. The percentage of time spent at your home office determines the deductible portion of your repair costs. The IRS has two methods to calculate your home office deductions.
If your home is rented, you can deduct your home office expenses on a per-square-foot basis. The simplified method simplifies the calculations, but you can only claim $5 per square foot of home office space.
In addition, if you rent your home, you can deduct the cost of home improvements on the property. This type of deduction is called indirect home office expense and can be based on the percentage of your home that is used for business purposes. Typical indirect expenses include insurance, utilities, rent, and mortgage payments.
Landscaping your front yard increases market value
A good landscaping plan is the best way to go about it. You’ll find that a reputable company will have a plethora of qualified contractors that can handle everything from your lawn to your pool to your entire home. Taking care of your prized possession should be on your to do list, especially if you are in the market for a new place to call home. Keeping in mind that not all homes are created equal, you may have to put your best foot forward in order to procure one. The competition will certainly be stiff. Hence, do the homework first before making that all important first impression.
Installing ramps and widening doors doesn’t increase cost basis
Did you know that installing a well-made ramp is one of the coolest home improvements you can put your name on? As you might expect, there are some restrictions. First of all, it has to be medically necessary. Second, it has to be a worthwhile endeavor. Finally, it has to be an effective use of your hard earned dollars. Luckily, the IRS has a lot of patience when it comes to taxpayers with a heart. If you’re lucky, you might even qualify for the benefits of the taxpaying masses. For the rest of us, it’s a matter of waiting your turn. As long as you’re prepared for the unexpected, the reward is well-earned.
The best part is that you can get a full tax credit on the money you paid for the work. You’ll also get a tax write off on the rest of your hard-earned cash.
Consult a tax professional
When considering home repairs or improvements, it’s important to consult a tax professional. Home improvements may be eligible for tax credits or deductions, depending on your situation.
Home improvements are projects that enhance the value of a home. Examples of common repairs include adding insulation to the attic or installing a new roof. Maintenance projects also include painting and power washing siding.
The IRS defines home improvements as “any activity that adds to the value of the property.” Some of these expenses are tax-deductible. Others are not. To be eligible for these deductions, your improvements must be permanent and last more than one year.
There are many ways to qualify for a tax deduction on your home repairs. For example, if your home is being rented, you can deduct your repair expenses. You can also deduct mortgage interest on a second mortgage.
Besides mortgage interest, you can deduct a variety of other home improvement expenses. These include replacing your roof, adding insulation, and even building a new driveway.