Many homeowners are used to using the interest they pay on their home loans as a tax reducer, but there are really a lot of different home improvement projects which may also make you eligible for a tax deduction, depending on the overall cost of the project and the circumstances surrounding it. Yes, you can often deduct the amount of interest you pay on your home loan or home equity loans, but there are also a multitude of home expenses and upgrades you can use to lower your taxes if you meet certain requirements.
Many home improvements and home remodeling projects can be counted towards reducing your income if you meet some special requirements. Sometimes you need to run a business or serve customers in a part of your house to be eligible for these credits, but there are other deductions you can use even if you do not work out of your home. The additions you make to your home can be eligible for income tax deductions or credits depending upon the size of the project, the reason for the home addition and your overall income situation. A lot of people have heard about the new environmentally friendly tax credits, but you should consider some of the expenses of other different home improvement projects as well.
Tax deduction for landscaping ? A while ago tax courts ruled that if you run your own business and meet clients regularly at your house you may be able to deduct a portion of your landscaping bills as a business expense because it makes your business more likely to succeed. You probably won?t be able to subtract the entire amount, but rather, you would have to deduct part of the cost in proportion to how much your business and home share the same space. This is just one of the many possible deductions you can take if you truly run your business from your home.
Swimming pool tax deduction ? Tax laws state that sometimes a portion of the expenses to put in a swimming pool can be deducted from your taxes if there is a solid health-related reason to use a pool. In one case a gentleman with low breathing capacity used a pool to exercise and increase his breathing strength. Since he used the pool more than his family he was allowed to deduct part of the expenses as a medical expense. You should also know that the IRS considers a swimming pool and a spa to be the same thing. Other medical devices for the home such as chair lifts for wheelchairs may also be eligible for a deduction. These deductions are important to keep in mind if you are applying for a loan to install a swimming pool because they can affect how much you should spend.
New roof tax deductions ? Certain roof types are considered to be more energy efficient and have a greater positive impact on the environment by reducing energy consumption and lasting longer. There are actually a number of energy-saving home upgrades that can make you eligible for a tax credit this year, but not all energy saving, or even all Energy Star, products qualify. Don?t forget that the roofing materials themselves are approved for the tax credit but the labor needed to install them does not qualify.
If you are planning on finishing some home upgrades this year, you should really look into the possible tax deductions that might be available! Not all home improvements qualify for tax credits, but with a little research you can almost surely save some money on your income taxes and upgrade your home at the same time. The rules for income taxes are always changing, so it may be helpful to speak with a qualified tax professional about your home improvements to find out of you are eligible for any of these special deductions. To be sure that you are counting everything you can, you will want to take copious notes, take a lot of photos and obviously keep all your receipts for every possible home addition expense.
Those are just a few of the possible ways your home improvement projects can save you money. If you really want all the details, then be sure to read our full guide to tax deductions for home improvements.
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