Ever heard of home improvement tax deductions? They are real, and they are out there just waiting for you to pluck them for your savings. Most people think deductions for home improvement taxes are nothing more than urban myth. When you tell people that you are doing improvements to your home, there will almost always be one guy who will tell you that you can get home improvement deductions from your taxes.
Yet, when you ask him to elaborate, he will never have any details. He always heard from a friend of a friend and cannot get any more specific. It is like some Roswell mystery based around your home improvements. But the home improvement tax deduction is not a mystery at all. In fact, it is quite simple and beneficial as long as you meet a few criteria.
First and foremost, the home improvements must be just that. It must increase the value of the home. Not only do you get to live in a better house because of the change, but you also get to earn some of the money back when you sell. It raises the value, and therefore the selling price of the home, and you can deduct the costs of the improvement from the earned amount of the sale come tax time.
Second, you must have lived in the house three of the last five years. This is to prevent people from scooping up cheap homes, remaking them and selling them at a huge profit, and then getting tax write offs in the process. They can still flip the house without ever having lived in it, and still make a tidy sum in the process. However the home improvement tax deductions are not available.
Then, in some instances, if the improvements are environmentally friendly, you can deduct a percentage of the costs from your taxes that year. For instance, in Connecticut, solar panels are a steal. When you purchase solar panels, the government gives you 30% right from the start. Then, when tax time rolls around, you can get an additional 30% deduction as well. That is essentially buying solar panels for 40% the price tag!
There are plenty of options out there for you to take advantage of home improvement tax breaks. You just need to be aware of state and federal regulations about what qualifies, and save those receipts! There are many bonuses to a home improvement project, so consider starting one today.