Whether you plan on staying in your home for 60 years or six months, there are many reasons to make a home improvement or renovation. Perhaps you are looking for a healthy return on investment if you should ever sell your home. Or perhaps you and your family are just sick of looking at that worn out linoleum in your kitchen. Regardless of the reason for your home improvement, it helps to first do your research to see if it is worth your while.
Home improvement and remodeling is a $230 billion business because homeowners know the real value of certain improvements. However, the difference between home maintenance projects versus improvements that add curb appeal are very important. To get the biggest bang for your home improvement buck, you need to consider a few things first. Is your project a want or a need? For example, do you want a swimming pool but need a new driveway? Likewise, will your project yield a good return on investment? A swimming pool typically does not, but a new roof could. In addition to a potential return on investment, many people question whether their home improvement can qualify as a home improvement tax decducation when it comes times to file their income taxes. Simply stated, you can not take a home improvement tax decducation, home improvement tax deductions, or reap the tax benefits of home improvement projects on your personal residence unless it is under very specific and very special circumstances. The special circumstances are as follows.
Whether your home improvement tax decducation is valid or not depends on its use. If, for example, a portion of your home is exclusively used for business, it may qualify as a home improvement tax decducation. If your home is exclusively used for business, this mean it is regularly and exclusively your principal place of business. Your dining room table where you have set up your laptop does not constitute as a principal place of business. Home businesses that qualify for home improvement tax decducation mean its a place where you regularly meet with clients, patients, et cetera. That being said, you can not make a home improvement tax decducation for every minor improvement. The Internal Revenue Service clearly states that for your home improvement tax decducation to be valid, it must pertain to expenses such as real estate taxes, mortgage interest, necessary repairs, and so forth. The Internal Revenue Service stresses that things such as lawn care do not qualify as a home improvement tax decducation.
The Internal Revenue Service does not give a hoot about your personal expenditures related to home improvements, either. Therefore, the Internal Revenue Service outlines specific rules that apply to what is considered a home improvement tax decducation.