Tax deductions related to home improvement has sparked a genuine interest among homeowners who would want to make changes to their home and think that this would give them tax breaks. It is still not clear what the extent of the laws on home improvement deductions are and so, should not be made a major consideration when making plans to further develop your property.
As a general rule, tax deductions do not apply to home improvement sans several conditions or situations that necessitate the changes. If the remodeling of the home is required for medical reasons, then you may be eligible for home improvement deductions. The need for a bigger room or bathroom, a ramp, or even a new staircase due to a recent disability can be considered part of a medical expense that can qualify for deductions. The regulation states that if one pays out more than seven percent of his or her income for expenses related to a medical condition, this can be subtracted from your taxes. Especially for home improvement work, it is expected that more than seven percent of your income will be spent. But these still need to be reviewed and approved for tax reliefs so it would not be wise to assume that improvements done on the basis of medical reasons will automatically be qualified.
Another such possibility for home improvement deductions is if the changes are needed for business reasons. Any additional renovation such as an additional room to be used as an office, a bathroom, or anything that can serve a practical purpose and is done to augment ones business can be a qualification for deductions as well. With more and more people doing SOHO (Small Office Home Office), improvements to the home to accommodate the new venture is expected. As with changes brought about by medical necessities, one must not assume that any work done will be approved for tax breaks.
Home improvements done under the two conditions specified above will need proper documentation that will need to be presented to a tax specialist. The tax specialist would be the best person to assess if any deductions can be availed of and if not, determine the reasons behind them.
In any case, renovating your home, other than to fulfill the two situations above can also be done for very basic causes. Aside from adding beauty to your home, you will also be adding value to it. The main motivation to make changes should not be the tax deductions one may derive from it, but the fulfillment of seeing and feeling the improvements as well as increasing the marketability of your home.
As a general rule, tax deductions do not apply to home improvement sans several conditions or situations that necessitate the changes. If the remodeling of the home is required for medical reasons, then you may be eligible for home improvement deductions. The need for a bigger room or bathroom, a ramp, or even a new staircase due to a recent disability can be considered part of a medical expense that can qualify for deductions. The regulation states that if one pays out more than seven percent of his or her income for expenses related to a medical condition, this can be subtracted from your taxes. Especially for home improvement work, it is expected that more than seven percent of your income will be spent. But these still need to be reviewed and approved for tax reliefs so it would not be wise to assume that improvements done on the basis of medical reasons will automatically be qualified.
Another such possibility for home improvement deductions is if the changes are needed for business reasons. Any additional renovation such as an additional room to be used as an office, a bathroom, or anything that can serve a practical purpose and is done to augment ones business can be a qualification for deductions as well. With more and more people doing SOHO (Small Office Home Office), improvements to the home to accommodate the new venture is expected. As with changes brought about by medical necessities, one must not assume that any work done will be approved for tax breaks.
Home improvements done under the two conditions specified above will need proper documentation that will need to be presented to a tax specialist. The tax specialist would be the best person to assess if any deductions can be availed of and if not, determine the reasons behind them.
In any case, renovating your home, other than to fulfill the two situations above can also be done for very basic causes. Aside from adding beauty to your home, you will also be adding value to it. The main motivation to make changes should not be the tax deductions one may derive from it, but the fulfillment of seeing and feeling the improvements as well as increasing the marketability of your home.
About the Author:
Nelson Wandi writes principally for http://www.insidewoodworking.com , an online publication about bamboo flooring pros and cons and install bamboo flooring. On his site you can come across his work on bamboo flooring pros and cons and bamboo flooring review.
