Are you contemplating a new home improvement project? Then you’re probably thinking about how to get the most bang for your renovation buck. While most people focus on the ROI (return on investment) of a project in terms of home value, one of the best ways to “save money” on such a project is to think about tax deductions. A general rule of thumb is that home repairs that return your home to its previous state are not tax-deductible. However, home improvements that increase the value of your home (like adding an addition or putting on a whole new roof) are. Read on for some great ideas.
Most renovations that you can do to improve your home’s energy efficiency will be eligible for a tax credit in the same year that you make them. There is a limit to how big a credit you can claim, and there are restrictions to what qualifies. Upgrades like solar panels are almost always included, and energy-efficient window and door installation often is as well.
Expenses related to installing medical equipment or access to your home usually qualify whenever you made the expense. Adding ramps, adding lifts, widening doorways or hallways, and installing support bars all fall into this category. These renovations are usually a deductible medical expense because they don’t specifically add value to your home.
Home Office Upgrades
Home office upgrades are considered tax-deductible expenses for anyone who is self-employed or who runs their business exclusively out of their home (and their office is exclusively used for work – it cannot also be your laundry room, for instance). Since many people are working from home, this is a little limiting, but it is good to keep in mind either way.
Additions For Rental Or To Increase Resale Value
If you rent part or all of your home, the repairs and upkeep that you have to do to keep it inhabitable can be tax-deductible expenses in the same year you arrange them. Suppose, instead, you are making improvements to the home so you can sell it (like finishing a basement or waterproofing). In that case, those capital improvements are deductible in the year you sell the property.
Call Matthews Construction and Design Today!
Ready to make some home improvements that update your Maryland home’s indoor or outdoor living areas? The professionals at Matthews Construction and Design can help. For over four decades, our experts have been successfully transforming residential properties, inside and out.
Are you ready to dive headfirst into your residential remodeling project? Or do you still have a million questions? Either way, the Matthews Construction and Design team is here to help you fulfill all of your remodeling needs.
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