Whenever you think about remodelling or renovating your home, you need to think about its expenses as well as whether it is tax-deductible. These questions may bother you for quite some time when you think about upgrading your home. So, there are several questions and information that you need to know if you are planning for a home remodelling. So, if you are wondering about the tax deduction status of home remodeling, let us discuss several crucial things.

What kind of home improvements are tax-deductible?

There are several types of home renovation or remodelling projects that can be eligible for a tax deduction. Hence, you need to know what kind of remodelling projects can be helpful for deducting taxes.

The differences between home repairs and home improvements

A home repair is a specific kind of modification that helps in restoring a home to its original value or state. Most home repairs cannot help in deducting taxes, except in the case of rental properties and home offices that one owns. Some examples of these repairs include fixing a faucet that is leaking, replacing window panes that are broken, replacing broken hardware, fixing carpet holes, etc.

On the other hand, home improvement is a specific type of modification that can help you a lot by increasing the value of your house. These improvements include the repairs like adding a new roof, a new driveway, new siding, several built-in appliances, insulation in the attic, etc. Home improvements can be tax-deductible, but some of those are only deductible in the year when you sell your property.

For example, if you completed your home improvement in the year 2016and sold the house in the year 2021, any tax deductions can be recognized on your tax return for the year 2021.

Now, let us discuss a few home improvements that are tax-deductible.

A few home improvements that can be tax-deductible

If you need to know if home remodeling can save your taxes, a then here are several examples:

• Improvements for home office

Home office improvements can be tax-deductible, and you can claim them in the same year. In recent years, improvements in home offices have become some of the crucial tax law changes. However, this facility is no longer available to staff who maintain a specific working area apart from the office of the employer.

However, there are some home office remodels that can still be deducted for those people who run their own business or are self-employed.

Home office improvements that can be tax-deductible:

1. Improvements in your office space.
2. Repair made to your office area directly.
3. Repairs made to some specific parts of the house (partially deductible).

• Renovations that are energy-efficient

Some specific home renovations that are energy-efficient, can offer you benefits regarding tax-deduction. However, installing solar energy systems on your existing or new house may offer you a 30% credit of the total expenses of installation. This credit is not restricted to your actual residence, and can be available for new houses. Some examples of energy-efficient home renovations that may be tax-deductible are:

1. Buying solar water heaters.
2. Installing solar panels.
3. Replacing exterior windows and doors with ones that can meet energy Star Program needs.

Therefore, whenever you worry about tax deduction through home remodeling, you can go through these home improvements without worry. However, if you are still hesitating, just contact GC Pro Remodeling.