Since the inception of the United States, the American Dream has been part of the idealist vision and ethos of citizens and immigrants who were hungry for freedom, prosperity, and upward mobility. If there ever were such a thing, the original vision of the American Dream probably grew out of the romantic notions American settlers held toward the untamed frontier.
Obviously, the definition of the American Dream varies from person to person, but home ownership is usually a part of it. But once you own a home it takes a considerable commitment to maintain it, and perhaps to add value to it. As such, nearly three quarters of American home buyers plan on making changes to their homes within a year after its purchase, and over half make significant renovations within the first five years.
When the time comes for homeowners to make home improvements and repairs, it is always wise to find out if their projects will qualify for home improvement taxes. If they do end up qualifying for home improvement deductions, they could save thousands of dollars.
While a homeowner should always seek advice from a professional who deals with home improvement tax deductions, there are a couple of ways to figure it out for themselves. Generally, home improvement projects that add value to a home will qualify for home improvement taxes, and projects that are considered routine maintenance will not. Although some homeowners might use the terms improvement and repair interchangeably, the IRS does not.
According to the IRS, a home improvement consists of a something that is not essential, yet adds value to a home. This could be an addition, installing a swimming pool, or adding a living room fireplace. On the other hand, a repair is something that will need to be done sooner or later as a mandatory part of home maintenance. Although a roof may be an improvement in the eyes of a homeowner, the IRS views roof replacement as routine maintenance. After all, roofs do not last forever, and should be replaced no less often than every 20 years.
As mentioned above, this article should not be treated as Gospel, but as basic information for the everyday homeowner. If one is a landlord or runs a business out of his home, he may be entitled to home improvement taxes for basic repairs. For these people it is particularly important that they get the opinion of a real estate attorney, home lending officer, or the IRS itself.