Tax Deductible Home Improvements
If you have wandered into the land of home improvement projects, you’re in for some good news. Did you know home improvements are tax deductible? The trick is to know which improvements for the home are tax deductible and which ones are not.
Okay here we go. The criteria for qualifying as a home improvement is to “Substantially Improve Your Home.”
- If it adds to the value of your home
- Prolongs your home’s useful life.
- Adapts your home to new uses
These improvements do not qualify:
- A simple repaint job. (unless part of a renovation that ”substantially improves “ your home)
- Repairs that maintain your home in good repair.
I think you get the idea now. If you happened to take out a loan and it wasn’t used to buy, build, or substantially improve your home, then it may qualify as a home equity debt. That’s a whole different topic and doesn’t fall into the improvement category.
Home improvements made to your home because of a medical necessity are tax deductible. You must keep in mind the fact that your deductions will have to exceed your earnings by 7.5%. Some of us know how quickly home improvements can add up especially for serious medical situations. The tax deductions can be a bit of good news during a difficult time in your life.
Here are some qualifying improvements:
- Wheel chair ramps
- Bathroom railings
- Lowering light switches
- Energy efficient windows
- Improved insulation
- Solar powered water heater