Don’t Forget These Home Tax Deductions
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A lot of homeowners are living in one of their largest tax deductions without even realizing it. This is especially true of people who have added on to their house or done some remodeling project recently. There are actually lots of different ways you can use home improvements for tax deductions. Sure, you can often subtract the amount of interest you pay on your home loan or home equity loans, but there are also a multitude of home expenses and repairs you can use to reduce your taxes if you meet certain requirements.
The additions you make to your house may qualify for income tax deductions or credits depending upon the cost of the project, the reason for the home upgrade and your complete tax situation. Many home improvements and home upgrades can be used towards reducing your income if you meet some special requirements. Sometimes you need to operate a business and meet customers in your home to be eligible for these deduction, but there are other deductions you can use even if you don’t work out of your house. A lot of people have heard about the new environmentally friendly tax credits, but you might want to also consider some of the expenses of other different home improvement projects as well.
Tax deduction for landscaping – You probably won’t be able to deduct the entire amount, but rather, you would have to deduct part of the cost 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 truly operate your business out of your home. A while ago tax courts ruled that if you operate your own business and meet 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 laws state that sometimes a portion of the costs to install a swimming pool can be deducted from your taxes if there is a solid health-related reason to use a pool. In one ruling a gentleman with decreased lung capacity used a swimming pool to exercise and increase his lung strength. Because he used the swimming pool more than his family he was allowed to deduct part of the costs 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 home such as elevators for wheelchairs might also qualify for a deduction.
Tax creditsfor 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 $1,500 for the next two years.
Not all home improvements are eligible for tax deductions, but with a little research you can definitely save some money on your income taxes and improve your home at the same time. The rules for income tax deductions are always changing, so it may be helpful to speak with a qualified tax professional about your home improvements to find out of you are eligible for any of these special credits. To be sure that you are deducting everything you can, you should take copious notes, take a lot of photos and obviously organize all your receipts for every possible home addition expense. If you’re planning on finishing some home improvements this year, you should really investigate the possible tax deductions that might be available!
Still haven’t filed your income taxes? You can often save a bundle of money with just a few minutes of reading about your possible home improvement tax deductions. You don’t need to hire home improvement contractors for these savings. Even if you’re a home improvement amateur, you can save lots of money by doing your own projects around your house.
categories: home improvements,tax deductions,home improvement,tax credits,personal finance,income taxes,taxes,home,finance,money,small business taxes,taxes,finance
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