Are home improvements are tax deductible? Generally speaking, most home improvements are not tax deductible. Although, there may exceptions for certain types of improvements.
If you plan on doing something like home renovation, garage conversion, or any upgrades for style, then you likely wont be eligible for tax deductions. In this article, we will go over some basic information about two types of home improvements that could qualify to be tax deductible.
What Home Improvements Are Tax Deductible?
There are two main types of home improvements that may be tax deductible, which include:
- Energy Efficient Home Improvements
- Medical Related Home Improvements
We will go into further details about each of these.
1. Energy Efficient Home Improvements That May Be Tax Deductible
There are a variety of energy efficient home improvements that could be tax deductible. Examples of energy efficient home improvements that may qualify for tax credits include, but are not limited to, the following:
- Solar Panels
- Solar Water Heaters
- Fuel Cells
- Geothermal Heat Pumps
- Small Wind Turbines
The energy efficient improvements listed above qualify for federal tax credits if installed on the primary home or secondary home of a homeowner.
How Much Tax Deduction Can You Get From Energy Efficient Home Improvements?
At the time of writing this article, currently known availability of presently existing tax deductions include federal tax credits of the following amounts, during the following dates, in regards to the energy efficient home improvements listed above:
- 30% for systems placed in service by 12/31/2019
- 26% for systems placed in service after 12/31/2019 and before 01/01/2021
- 22% for systems placed in service after 12/31/2020 and before 01/01/2022
Tax credits listed above are involved with installation costs.
Information listed above should not be used to make any financial decisions without consulting with a professional. Laws are constantly changing and being updated, so you should have a local professional look into it and confirm any currently existing tax deductions that may be available in your city, state, and federally.
2. Medical Related Home Improvements That May Be Tax Deductible
Various types of medical related home improvements may be tax deductible.
Examples of some home improvements done for medical purposes that may be eligible for tax deductions include the following:
- Building wheelchair entrances for disabled persons.
- Building wheelchair exit ramps for disabled persons.
- Widening hallways for wheelchair.
- Widening doorways for wheelchair.
- Remodeling kitchen cabinets to make them lower for disabled persons on wheelchair.
- Adding lifts for disabled persons to get from one floor to another with a wheelchair.
- Installation of support bars in a bathroom.
- Installing or upgrading fire protection systems such as fire alarms and smoke detectors.
Although it is possible that the medical related home improvements on list above might be tax deductible, you should always consult with professionals in your area to make certain of currently available tax deductions before making any financial decisions.
Laws involved with tax deduction can always change and get updated. Information on this article should not be used for making any financial decisions. Please seek updated information from a professional near you about current tax deduction eligibility before making any financial decisions.
Feel free to get in touch anytime.