Are Home Improvements Tax-Deductible?

When tax time rolls around, taxpayers are looking for ways to minimize their tax bills. There are many deductions left on the table because people don’t know what they can deduct.

Homeowners may wonder: are home improvements tax-deductible? The answer is not simple.

The federal tax codes are clear on what items are tax-deductible. It also outlines which home improvements are eligible for tax credits.

Are you looking for tax information on home improvement ideas? Keep reading to learn more about home improvements and tax deductions.

Are Home Improvements Tax-Deductible?

Home improvement projects are typically not eligible for tax deductions. However, there are circumstances when improvements to the home can become eligible as a deduction.

It is important to contact a tax professional to be sure any deductions taken are allowed.

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Tax Deductions are Not the Only Reason to Renovate

If you have home improvement ideas, do not let tax deductions determine if you will move forward or not.

Major repairs often require home improvement financing. The interest and fees on the loan can be used as a deduction.

Replacing your granite countertops will not qualify for a deduction. The cost of a decomposed granite installation may be eligible if financed.

Utilizing a home loan to finance your renovations are covered as long as the home is used to secure the financing.

Renovations for Home Offices

As a business owner, you already know there are many deductions you can take if you have a home office. What you may not know is that expenses incurred to convert a space into an office are deductible.

In most instances, 100% of home office expenses are deductible. Home improvement ideas for a home office can include things as simple as painting the walls.

It can also be as extensive as modifications to improve wiring or to modify space size.

Accessibility for Physically Disabled Individuals

Are you renovating your home to accommodate the needs of a physically disabled individual? These expenses will fall under medical deductions.

Oftentimes, out-of-pocket medical expenses do not amount to enough for a significant dent in your tax obligation.

However, if you make expensive modifications to your home, those expenses can fall under medical expenses.

Widening entryways, installing a wheelchair ramp, and alterations to counter heights are just a few of the eligible expenses.

When it’s Time to Sell

Although you may not be able to claim a deduction for home improvement ideas to beautify your home, improvements and renovations will increase your home’s resale value.

When you sell your home, there are tax deductions you can benefit from.

These include expenses incurred during the process, including realtor fees, title insurance, escrow fees, and the costs incurred for marketing the home.

Your Home Deserves an Upgrade

Answering are home improvements tax-deductible is a complex conversation? You will need to know the tax codes and where to find the best deductions for your situation.

If a home remodel is in your future, we have the latest home improvement ideas. Check back regularly for trending features.