Are you Eligible for a Home Improvement Tax Deduction?

Home improvement tax

Let’s be honest. Who does not like to find more deductions for their taxes? If you are a home owner who has made improvements to their home and have recently sold your property, you could be eligible for a home improvement tax deduction. An owner can’t deduct home improvements from his income taxes, HGTV states, but he can write them off on his capital gains tax when the house is sold.

Home improvements, but not repairs or maintenance, can be deducted from the gain on the house: If the owner bought it for $200,000, spent $50,000 on remodeling and sold it for $325,000 a year later, the taxable gain would be $75,000. Home improvement tax decducation is typically not well known among many people who do their own taxes, so if you feel you may be eligible, you may want to consider sitting down with a professional to determine if you are.

Have you remodeled a part of your home for business purposes? Home improvement tax deductions can also be taken for individuals who have created a workspace for themselves at home. Aside from general home improvement tax deductions, homeowners are also eligible for tax deductions if they have renovated any part of their home to use as a home office. A homeowner can claim a home office deduction for the space in her house used for business, whether it’s for a literal office, or even inventory storage. For example, if the workspace takes up 8 percent of the square footage
the owner can claim 8 percent of utilities, property taxes and mortgage interest as a deduction.

Clearly, there are several advantages, aside from making your home more aesthetically pleasing, to renovating and going through home improvements. You may be eligible for a home improvement tax deduction. If you are unsure about whether you are eligible for the tax benefits of home improvement, you can consult a professional for a straight forward answer.

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