Save Big on Home Improvements!

Home improvement taxes

In the United States, the two most frequently remodeled rooms are kitchens and bathrooms. The average bathroom remodel costs around 15,700 dollars, while kitchen remodeling projects can cost between 18,500 dollars for minor remodeling to nearly 54,000 dollars for major renovations. Any way you slice it, remodeling is expensive. Then again, almost any type of home remodeling job will add thousands of dollars of value to your home; and it is even possible to save thousands of dollars via home improvement deductions.

Unfortunately, not all home improvement projects will qualify for home improvement loans. This is because the IRS makes a distinction between how it defines a home improvement and how it defines home repair. While homeowners may consider the difference between an improvement and a repair to be a minor issue of semantics, there is a considerable difference in the eyes of the IRS; and that difference can end up saving you thousands of dollars.

While renovating a kitchen or bathroom will almost always be considered a home improvement, many projects that typical homeowners might consider improvements the IRS might classify as basic maintenance. For instance, although most homeowners will consider roof replacement to be an improvement to his or her home, the IRS will usually it basic home maintenance, because any home will need a new roof inside of 20 years. Therefore, unless a project adds value to a home, it will be considered regular maintenance, and will not qualify for home improvement deductions.

However, home improvement taxes are not always that simple. But that is not necessarily a bad thing, particularly for landlords or anyone who generates income from properties they own. For example, since landlords make money from their properties, replacing the roof on one of their properties will usually qualify for home improvement deductions. Likewise, homeowners who run businesses out of their homes can also make home repairs that will qualify for home improvement tax deductions.

As a means of clarification, this article is by no means intended to be a go to source for everything homeowners need to know about home improvement deductions. It is basic information that is intended to highlight crucial distinctions between home improvements and home repairs. Therefore, it is recommended that homeowners always seek the advice of experts, such as real estate attorneys or lending organizations, before going ahead with any type of home improvement or repair project; because gray areas do exist.

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