Taxes are one of the few things in life that are simply unavoidable. As tax season rolls around this year, consider some of the things that you have done to your home that have improved its performance, if only so you get to earn deductions and lower your tax bill for the 2012 calendar year (or, even better, get more back from the government if you already plan on receiving a refund). Use this handy checklist to see which home improvement tax deductions you actually may qualify for, then start filing and awaiting that check or tax break.
One: Look at whether you made any purchases on appliances around your home that are either Energy Star qualified or that are deemed energy efficient by the manufacturer. This simple step involves looking around your house for that Energy Star sticker or looking through your appliances’ user guides, which will detail whether these products are energy efficient. For any purchases, keep the receipts and file them away in your home improvement tax file to eventually give to your accountant.
Two: If you have had to make necessary upgrades, like with your air conditioning or heating system, you probably automatically qualify for a home improvement tax break since the systems that are in use today are all much more energy efficient than their earlier counterparts. Any replacing of these systems could mean a significant home improvement tax deduction, so pay very close attention to the specifications on these units so a deduction can be made. Also think about any upgrades you have made to your windows or your home’s doors and determine whether those upgrades actually resulted in higher levels of energy efficiency around the home. If they were new products with an energy efficient label on them, they likely qualify for the tax breaks that are detailed through the federal government.
Three: If you have already hired an accountant or a tax professional, set up an appointment with this person to go through everything well in advance of the 2012 tax filing deadline. The tax benefits of home improvement are different than they were a few years ago when more home improvement tax breaks were issued, and only a certified public accountant or certified tax professional with experience assisting clients in understanding the tax implications of their home improvement projects can definitively answer questions regarding which improvements qualify for deductions and which do not.