Home Improvement Tax Deductions

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Many homeowners are living in one of their biggest tax deductions without even realizing it. This is especially true of people who have added on to their home 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 other home expenses and repairs you can use to reduce your taxes if you meet certain requirements.

The additions you make to your home may qualify for tax deductions or credits depending upon the size of the project, the need for the home addition and your overall tax situation. Many house improvements and home remodeling projects can be used towards lowering your income if you meet some certain requirements. Sometimes you need to run a business and serve 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 home. Some people have heard about the new environmentally friendly tax deductions, but you should consider some of the costs of other different home improvement projects as well.

Tax deduction for lawn care ? This is only one of the many possible deductions you can take if you really operate your business out of your home. In the past tax courts ruled that if you operate your own business and serve customers regularly at your home you may be able to deduct a portion of your lawn care costs as a business expense because it makes your business more likely to succeed. You probably will not be able to deduct the entire amount, but rather, you would have to deduct a portion of the cost in proportion to how much your business and home share the same house.

Pool tax deduction ? Tax laws state that in some cases a portion of the expenses to put in a pool can be deducted from your taxes if there is a valid medical reason to use a pool. You should also know that the Internal Revenue Service considers a pool and a spa to be the same sort of medical device. In one ruling a gentleman with decreased lung capacity used a swimming pool to exercise and increase his lung strength. Since he used the pool more than his family he was allowed to deduct part of the costs as a medical expense. Other health-related devices for the home such as elevators for wheelchairs might also be eligible for a deduction. These credits are important to keep in mind when you are applying for a loan to install a swimming pool because they can affect how much you can afford.

New roof tax credits ? Certain roof types are considered to be more energy efficient and have a greater positive impact on the environment by reducing energy consumption and lasting longer. There are actually a number of energy-saving home upgrades that can make you eligible for a tax credit this year, but not all energy saving, or even all Energy Star, products qualify. Don?t forget that the roofing materials themselves are eligible but the labor required to install them does not qualify.

To be certain that you are deducting everything you can, you will want to take copious notes, take plenty of photos and obviously organize all your receipts for every possible home improvement expense. If you?re planning on finishing some home projects this year, you should really look into the possible tax credits that may be available! Not all home improvements are eligible for tax credits, but with a little planning you can definitely 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 might be beneficial to speak with a qualified tax expert about your home improvements to find out of you qualify for any of these special credits.

Those are just a few of the many ways your home improvement projects can save you money. If you really want all the details, then be sure to read our full guide to home improvement tax credits.

Source: http://articlefolders.com/finances/taxes/home-improvement-tax-deductions/

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