If you’re a homeowner who pays yearly taxes in the United States then you may know that there are many different costs that you can take off from your annual income to reduce your taxes and save cash each year. Sure, you can usually deduct 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 taxes if you meet certain criteria.
The improvements you make to your house may qualify for income tax deductions or credits depending upon the cost of the project, the need for the home improvement and your overall income situation. Many home improvements and home upgrades can be counted towards reducing your income if you meet some certain requirements. Sometimes you need to operate a business or meet customers in your home to qualify 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 credits, but you might want to also consider some of the costs of other various home improvement projects too.
Tax deduction for lawn care – You probably won’t be able to subtract the entire amount, but rather, you would have to deduct part of the expense in proportion to how much your business and home share the same house. This is just one of the many possible deductions you can use if you really operate your business out of your home. A while ago tax courts ruled that if you operate your own business and serve customers regularly at your house you may be able to deduct a portion of your lawn care bills as a business expense because it makes your business more likely to succeed.
Pool tax deduction – Tax rules state that sometimes a part of the costs to install a swimming pool can be deducted from your taxable income if there is a valid health-related reason to have a pool. In one case a gentleman with decreased lung capacity used a swimming pool to exercise and increase his breathing strength. Since he used the swimming pool more than his family he was allowed to deduct part of the expenses as a medical expense. You should also know that the Internal Revenue Service considers a pool and a spa to be the same sort of medical device. Other medical devices for the house such as elevators for wheelchairs might also qualify for a deduction.
Tax deductions for new doors – Select Energy Star entry doors that meet certain energy efficiency criteria are eligible for a tax credit of up to 30% of the cost of the door with a maximum tax credit of $1,500. If you are going to install new doors this year, make sure they meet the minimum requirements for this tax deduction.
Not all home improvements qualify for tax deductions, but with a little planning you can almost surely save some cash on your federal taxes and upgrade your home at the same time. The rules for income tax deductions are always changing, so it may be beneficial to speak with a qualified tax expert about your home improvements to find out of you qualify for any of these special deductions. To be sure that you are counting everything you can, you should take copious notes, take a lot of photos and of course organize all your receipts for every possible home addition expense. If you are planning on finishing some home improvements this year, you should really look into the possible tax credits that might be available!
Still haven’t done your taxes? You can often save a lot of money with just a few minutes of reading about your possible home improvement tax deductions. You don’t need to hire professionals for these savings. Even if you’re a do-it-yourself home improvement amateur, you can save lots of money on projects around your house.