Home Improvement Tax Deductions | Simple Solutions

Many homeowners are living in one of their largest tax deductions without even knowing it. This is especially true of people who have upgraded their home or done some remodeling project recently. There are actually lots of different ways you can use home improvements for tax deductions. Yes, you can usually subtract the amount of interest you pay on your home loan or home equity loans, but there are also other home expenses and upgrades you can use to reduce your taxable income if you meet certain criteria.

The changes you make to your home can qualify for tax deductions or credits depending upon the cost of the project, the need for the home improvement and your complete tax situation. Many house improvements and home upgrades can be counted towards lowering your income if you meet some special requirements. Sometimes you need to run a business and meet customers in your home to be eligible for these credits, but there are other deductions you can use even if you do not work out of your house. A lot of people have heard about the new energy efficiency tax deductions, but you might want to also consider some of the costs of other various home improvement projects as well.

Tax deduction for lawn care ? This is only one of the many possible deductions you can take if you truly run your business from your home. A while ago tax courts ruled that if you operate your own business and serve clients regularly at your home you may be able to deduct a portion of your landscaping costs as a business expense because it makes your business more viable. You probably won?t be able to subtract the entire amount, but rather, you would have to deduct a portion of the expense in proportion to how much your business and home share the same house.

Pool tax deduction ? Tax rules state that in some cases a portion of the costs to install a pool can be deducted from your taxable income if there is a solid medical reason to use a pool. In one ruling a gentleman with decreased 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 a portion of the costs as a medical expense. You should also know that the Internal Revenue Service considers a swimming pool and a spa to be the same thing. Other health-related devices for the home such as elevators for wheelchairs might also qualify for a deduction. These deductions are essential to keep in mind if you are applying for swimming pool financing because they can affect how much you can afford.

Tax credits for new windows ? If you are planning to upgrade and replace your home?s old windows with new energy efficient ones, now is the time to do it. There are now tax creditsin place for the 30% of the cost of eligible windows, up to a set amount of money for the next two years. Remember that the windows themselves are approved for the tax credit but the labor required to install them is not eligible.

To be certain that you are deducting everything you can, you will want to take copious notes, take plenty of photos and of course keep all your receipts for every possible home addition expense. If you are planning on finishing some home upgrades this year, you should really look into the possible tax savings that might be available! Not all home improvements are eligible for tax deductions, but with a little planning you can almost surely save some money on your income taxes and improve your home at the same time. The rules for income taxes are always changing, so it might be beneficial to speak with a qualified tax expert about your home improvements to find out of you qualify for some of these special deductions.

Those are just some of the many ways your home improvement projects can save you money on your income taxes. If you really want all the details, then be sure to read our full guide to reducing your income taxes with home improvements.

Source: http://simplesolutionweb.com/money/home-improvement-tax-deductions

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