Did you know, according to Jeff Brown of Main St., you should expect to pay 1% of your home’s value in home improvement and maintenance costs on a yearly basis? Brown points out that this is a minimum. For example, if your home is worth $250,000, you should expect at least $2,500 per year in improvement costs. The fact is that scraping together that money year after year can add up. To lessen this burden, you should take advantage of any home improvement deductions the United States government offers you. Here’s how.
- What Qualifies as Home Improvement?
- Did You Give to Charity?
- Think Green to Save Some Green
What qualifies for home improvement tax deductions can vary from year to year. Shana Ecker of The Huffington Post points out that, generally, things like plumbing, wiring, roof replacement, and other procedures meant to lengthen the life of your home are eligible for tax benefits. The IRS publishes the “Tax Information for Homeowners” guide every year to help American homeowners prepare their taxes with deductions in mind. If you are unsure if your work is covered, then this is the best place to start.
One thing homeowners often overlook when looking for breaks on their home improvement taxes is the role of charity. When you are redoing your kitchen, replacing the couch, or turning your college student’s bedroom into a pool hall, you are likely left with items you no longer need. Jennifer Carmon writes in “Most overlooked home-related tax deductions” that if you choose to donate these items to Goodwill, Salavation Army, or other charity organizations, then you can deduct their cost from your taxes. Not sure what you can donate for home improvement deductions? Check out Goodwill’s webpage for a full list.
Did you know that many energy efficient appliances are eligible for tax breaks? Energy Star maintains a full listing of the items that qualify, their requirements, and the estimated deduction. For instance, installing a bio-mass stove with a thermal efficiency rating of 75% or more can net you a $300 tax break. Other qualifying appliances include windows, roofing, and insulation. Be sure to check the guide frequently as benefits shift from year to year.
If you were wondering how to catch a break on your home improvement, hopefully you now know how to do so. If you are unsure what qualifies as home improvement, as deductible charity, and green appliances benefiting from tax breaks, be sure to seek out the IRS, Goodwill, and Energy Star websites. Using them in tandem can save you a nice chunk of change through home improvement deductions.