Are home remodeling costs tax deductible? Read on to find out how home remodeling projects can affect your taxes.
There is no sugarcoating it. Home remodeling projects are a significant investment of both time and money. As a homeowner, you may be thinking about how to offset these costs and wonder, “Are home remodeling costs tax deductible?” While home remodeling costs do not often provide a tax break, there can be a few exceptions. Here are a few home remodeling costs that may potentially be tax-deductible.
- Energy-Efficient Improvements
Installing energy-efficient equipment in your home may make you eligible for a tax credit. Examples include energy-efficient windows, doors, and systems, as well as solar panels.
- Renovations Related to Medical Needs
Home improvements related to your or someone within your household’s medical needs may qualify as a deduction. Examples of these remodeling projects include adding ramps to entrances, lowering cabinets, widening hallways and doorways, and installing a lift.
- Home Office Remodeling
If you are self-employed and have a designated space within your home from which you work, you can usually deduct the costs of any improvements or repairs to this space.
Although most home remodeling costs are not tax-deductible, they can eventually have a tax benefit. If you end up selling your home for profit, home improvements you made during your homeownership may help reduce the taxes you pay. It is important to note that standard home repairs do not count towards this reduction (such as painting or fixing gutters), only significant improvements, often referred to as capital improvements (such as remodeling a basement, adding a pool, or replacing your HVAC). As you make your home improvements, keep track of costs by saving receipts, invoices, and bank statements to account for your expenses when you sell your home.
Even though you may better understand the answer to the question, “Are home remodeling costs tax deductible?”, you should consult a tax professional for further verification about your specific situation. Once you are ready to embark on your project, consider consulting a home remodeling professional, like Criner Remodeling, to ensure a successful completion.
Criner Remodeling has more than four decades of experience providing home remodeling services to York County and the surrounding Hampton Roads community. Our team of professionals are knowledgeable of the most up-to-date products, standards, and best practices in the remodeling industry. We will work with you directly to bring your vision for your home to life. Contact us today to schedule your consultation.