You may be thinking, “Tax season just ended. I don’t want to think about taxes!”
You are absolutely correct. However, when the time comes to file taxes, we often realize what we could have done throughout the year to prepare for tax season. Sometimes while we’re filing taxes, we discover the types of deductions we could have gained had we been informed. Therefore, these home improvement tips may come in handy.
- Install Qualified Energy Generating Systems – You can earn tax credits simply by the installation any renewable energy sources. This improves the energy efficiency of your home and the tax credits could help with the burden of the cost. For example, tax credits are offered for installing solar, wind and geothermal technology.
- Invest in a New Roof – According to Yahoo! Finance, the Nonbusiness Energy Property Credit allows for a tax break for installing a new roof. The IRS says it applies to, “any metal roof with appropriate pigmented coatings or asphalt roof with appropriate cooling granules that are specifically and primarily designed to reduce the heat gain of your home.”
- Purchase Approved Appliances – If you bought a new major appliance, such as a refrigerator or washing machine, check the Energy Star Rebate-Finder to receive information on the possible local utility rebates.
- Medical Home Improvements – Medical renovations in your home can be deducted from your income as medical expenses if the renovations are a medical necessity. For example, exit ramps, modifying bathrooms and adding hand rails can be deducted if needed.
- Use Your Mortgage – If you invest in your home improvements at the time the house is purchased, the mortgage you take out to buy the home includes the additional money to renovate. You are able to then deduct the interest on this amount from your income as part of your mortgage interest deduction.
There are several ways you can use home renovations to decrease your taxes to help you out during tax season. Increasing your knowledge about improvements on your home and implementing these changes may benefit you when tax season sneaks up.