Can Home Improvements Reduce Your Taxes?

Home improvements can be exceptionally expensive.  A simple redesign of your bathroom can end up costing thousands of dollars.  One thing that many people wonder is whether or not all of these repairs and home improvements can help you lower the taxes that you owe at the end of the year.  While you can’t take a deduction for painting your house, repairing damaged items, or just changing things for fun, there are many deductions if you are able to improve the value of your home, prolong its life, or create new uses.  There are also deductions for home improvements that make your home greener.

If your home improvements have made your home handicap accessible, then there are definitely deductions for you.  The same is true if you own a home business and made improvements to the office area of your home.  Adding solar panels or energy efficient heating systems can help you get a big deduction at the end of the year, and rebuilding the structure of the home to help it last longer will take off a chunk of that tax debt, as well.

Ultimately, whether or not your home improvements are tax deductible will depend on their purpose.  Upgrades that are solely cosmetic are typically not covered, but if you can prove that they make your home safer, better, or more valuable, you might just find yourself with major deductions.  Talk to a tax expert to find out what percentage of your home improvements can be deducted.