To maintain a house in a considerably livable state, it has to go through necessary improvements and repairs. But did you know that if you plan it strategically, you can enjoy some tax deductions when you improve your home?
If you are thinking of adding a swimming pool or installing a centralized air conditioning system, you may do so. But you have to take note that home renovations like these will not give you tax benefits.
Energy Efficient Upgrades
The Residential Energy Efficiency Tax Credit is aimed to help homeowners who have made efforts to make their dwelling more energy-efficient. Although this tax credit program has expired last year, those qualified equipment purchased and installed prior to January 1, 2017 are still eligible.
It should be noted that not all energy-efficiency improvements are qualified. So, be sure to ask your local tax officer if your equipment qualifies.
For purchases done in 2009 to 2010, a limit of $1,500 can be credited. This is the total amount of credit for all qualified energy-efficient technologies installed. For those whose purchases were made in 2011 to 2016, the aggregate credit amount is limited to $500.
The Home Office
For a home space to be considered a home office it has to meet the IRS requirements. It should not be a space that is also used as a recreational room by any member of the household.
The improvements and repairs you do in this particular space in the house can be subject to deductions, given you have passed the IRS guidelines. And if your home office takes up 15 percent of the entire space of the house, you can depreciate 15 percent of the cost of some added home features.
Safety and Health-Related Renovations
If one of the reasons you are doing renovations is to make your residence a safer place for someone who has a medical condition or is disabled, you may enjoy some tax write-off.
You have to make sure though that these improvements are done to provide ease and comfort. Examples of these home additions would be constructing ramps, installing a wheelchair stair lift, or reconstructing hallways and doorways to improve wheelchair access.