Tax Write-Offs That Are Available For Home Improvements

by Debbie Goldberg 11/01/2018

One of the biggest benefits to buying a home is that of the tax savings for you. You own a home now, so there’s no more monthly rental payments going out the window. All of your mortgage payments are going towards your financial future. There’s many different types of tax breaks that you can get from owning your home. Many home improvement projects that allow you an extra tax break are hiding right in the fine print! Tax breaks are known as “incentives.” These incentives are essentially what help people to get important things in their homes done without having a order placed on them. There are some hidden things that you may not have known could be used as tax write-offs.

Energy Savings

From putting solar panels on your home to replacing appliances, there are certain tax breaks that you can get for making your home more energy efficient. There are lifetime caps on these deductions, but on a certain year, you’ll be able to save some extra money on your taxes. Some of the deductions that you might be able to claim include:

Air-source heat pumps
Biomass stoves
Central AC units
Water heaters
Certain energy-generation systems which include an array of things like water heaters, solar panels, fuel cell systems, wind turbines, and geothermal heat pumps.

You can deduct somewhere in the neighborhood of 30% of the cost of these improvements to your home. It doesn’t hurt to check on the updated standards that are introduced each year by the government. Your accountant can help you to understand your own deductions a bit more in-depth.

Modifying Your Home For Medical Needs

If you need to modify your home in order to accommodate medical needs, you may be eligible for a tax deduction. The modifications must not increase the value of your home and be medically necessary. If the doctor tells you to lose weight and you put in a home gym, you can’t deduct that. If you need a ramp put in your home for wheelchair accessibility, then that can be deducted. The cost of the modifications generally has to exceed 10% of your adjusted gross income, or 7.5% if you’re over the age of 65.

What’s Not Deductible

If you have done some major remodeling around your home, it’s sad to say that these improvements probably aren’t tax deductible. On the positive side, you will get a bigger return on your home when you do decide to sell it. This could help you to reduce any capital gains tax that you may have to pay on the sale of the home.

Remember that when you make improvements to your home, you’re doing it first for your own needs. Any tax write-offs that you may get are merely a bonus.

Tax Credit

Tax Tips

Home Impovements

About the Author

Debbie Goldberg

I'm a full time Realtor with over 30 years of experience yet young enough to embrace today's ever-changing scope of marketing and technology. Having grown up in Connecticut and moved many times (too many to count!) I can empathize with today's buyers and sellers. Strictly maintaining ethical standards and being a fierce advocate on behalf of my clients are things I take very seriously. As a buyer, you can expect me to listen to and evaluate your real estate wants and needs. I can assist in explaining relevant forms, agreements, and closing procedures. I will guide you through the process of finding the right home, negotiating your offer, adhering to all contract dates and terms as well as final walk through and closing procedures. As a seller, I will listen to and evaluate your goals, needs, and timing in order to properly price your home to get the maximum exposure needed to attract the right buyers. In addition to negotiating on your behalf, I will make sure we communicate throughout the entire process as we navigate the contract terms, finance and inspection contingencies, as well as all closing procedures. I was born in Japan, grew up in Hamden and lived in New York, Ohio and Southern California before settling down in New Haven county to raise two kids, two dogs and a cat. I'm passionate about good food and love to bake. Some of my free time has been spent volunteering at Temple Beth Sholom, a synagogue where my family has been members for over 40 years. I also spend time at Tower One/Tower East, an assisted living center in New Haven where my mother-in-law now resides. 30 years of helping buyers and sellers achieve their goals has given me the peace of mind to know that what I do everyday matters. If you are thinking of buying or selling please keep me in mind.