Home Improvement Tax Deductions - Finance

A lot of homeowners are living in one of their biggest tax deductions without even realizing it. This is especially true of people who have added on to their home or done some remodeling project recently. There are actually lots of different ways you can use home improvements for tax deductions. Yes, you can often subtract the amount of interest you pay on your home loan or home equity loans, but there are also a multitude of home expenses and upgrades you can use to reduce your taxable income if you meet certain criteria.

Many home improvements and home remodeling projects can be counted towards reducing your income if you meet some special requirements. Sometimes you need to run a business and serve clients in your home to be eligible for these credits, but there are other deductions you can use even if you don?t work out of your home. The improvements you make to your home may qualify for income tax deductions or credits depending upon the size of the project, the reason for the home upgrade and your overall tax situation. A lot of people have heard about the new environmentally friendly tax credits, but you should consider some of the expenses of other various home improvement projects as well.

Tax deduction for lawn care ? In the past tax courts ruled that if you operate your own business and meet customers regularly at your home you may be able to deduct some of your lawn care bills as a business expense because it makes your business more likely to succeed. You probably will not be able to subtract the entire amount, but rather, you would have to deduct a portion of the expense in proportion to how much your business and living areas share the same house. This is just one of the many possible deductions you can take if you really operate your business from your home.

Swimming pool tax deduction ? Tax rules state that sometimes a part of the expenses to install a swimming pool can be deducted from your taxable income if there is a solid medical reason to have a pool. In one ruling a gentleman with decreased lung capacity used a pool to exercise and increase his lung strength. Since he used the swimming pool more than his family he was allowed to deduct part of the expenses as a medical expense. These deductions are essential to keep in mind when you are applying for a pool loan because they can change how much you can afford. Other health-related devices for the house such as elevators for wheelchairs might also be eligible for a deduction. You should also know that the IRS considers a pool and a spa to be the same thing.

Tax credits for new doors ? Select Energy Star entry doors that meet certain energy efficiency criteria are eligible for a tax credit of up to 30% of the cost of the door with a maximum tax credit of $1,500. If you are going to install new doors this year, make sure they meet the minimum requirements for this tax deduction. Remember that the doors are approved for the tax credit but the labor required to install them is not eligible.

Not all home improvements qualify for tax credits, but with a little planning you can almost surely save some money on your federal taxes and upgrade your home at the same time. The rules for income tax deductions are always changing, so it might be helpful to speak with a qualified tax professional about your home improvements to find out of you are eligible for any of these special credits. To be sure that you are counting everything you can, you should take lots of notes, take a lot of photos and of course keep all your receipts for every possible home addition expense. If you?re planning on finishing some home improvements this year, you should really look into the possible tax deductions that might be available!

Those are just some of the many ways your home improvement projects can save you money on your income taxes. If you really want all the details, then be sure to read our full guide to tax deductions for home improvements.

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Source: http://www.thestocktradinginvestment.com/2012/02/15/home-improvement-tax-deductions/

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