If you are considering a home renovation project, you have no doubt also begun to consider the various related financial implications and any pros and cons to renovating your home. For instance, you may be wondering if your home renovation project will be tax-deductible. The answer to this question varies and it is always best to consult a qualified tax professional before you make any tax-related decisions. However, there are a few key points to consider when it comes to home projects and taxes.
Repairs And Renovations Are Not The Same Thing
Maintenance is one of the most important, yet least fun parts of homeownership. Every home requires maintenance over time and these costs can certainly add up. Unfortunately, home repairs are not typically tax-deductible. Things like replacing a broken appliance, replacing shingles, or replacing a broken window do not qualify as tax deductions. Now, replacing your regular shingles with solar shingles, or getting new energy-efficient appliances and windows installed, on the other hand, may qualify for tax credits.
Many home renovations may qualify as capital improvements. According to TurboTax, a capital improvement is something that adds value to your home, prolongs its life or adapts it to new uses. Below is a list of home renovation projects that may count as capital improvements.
- A new home addition
- A swimming pool
- A new HVAC system
- Home security system
- An additional hot water heater
Keep Potential Tax Considerations In Mind When Renovating
Ready to get started on a renovation project? Contact your accountant to find out what might count as a tax deduction during your home renovation. If you are redoing your kitchen, consider adding appliances that have been Energy Star rated. Want to add a new addition to your home? Be sure to include energy-efficient windows and solar roof onto your wish list. Expanding your master bathroom? It might be time to consider an additional hot water heater. Or, if you are redoing your outdoor space, perhaps a swimming pool or new outdoor room is just the thing you need.
Get Value Out Of Your Home Renovation Project
Tax deductions should never be a reason for doing a home renovation project, but they can certainly help make you feel better about the investment. The most important thing to consider when thinking about home renovation projects is whether or not this is something that you and your family will be able to enjoy and take advantage of. The renovation experts at CQC Home are here to walk you through the process. Ready to get started? Contact our team today.