Maximizing the Tax Benefits From Your Home ImprovementsApr 22, 2019
Regardless of whether you’re planning to sell your home or stay in it all your life, updating your home can have excellent returns on your investment. New roofing and siding can help brighten your home’s exterior while increasing its resale value. And, just in case you do decide to sell your home in the future, you can use the cost of home improvement projects to lower the taxes on the sale.
But sometimes, it’s easy to mistake a home repair for a home improvement project.
Capital Improvements vs. Home Repairs
Only home improvements or ‘capital improvements’ are tax deductible. For a project to qualify as a capital improvement, it has to meet the following criteria:
- It has to last for more than a year.
- You’ve added components that will allow the home to have new functions, e.g., home office improvements for the self-employed and entrepreneurs.
- It has to extend the lifespan and increase the resale value of the building.
On the other hand, a home repair project doesn’t add to your property’s value or lifespan; it just brings it back to its original condition. So, while a complete overhaul of your roofing can give you a tax deduction, replacing a few shingles won’t.
Tax Deductible Home Improvement Ideas
Knowing whether a home improvement project is deductible can be tricky, though. That’s why Rogers Roofing gives you some tips on how to maximize the tax benefits from your home improvements.
- Home Office Improvements – Keep in mind that only improvements to your main office are fully tax deductible. Everything else, including other repairs made in relation to the home office, is only partially deductible.
- Home Exterior Improvements – When in doubt, it’s a safe bet to pursue improvements to your home exterior, e.g., a roof overhaul, new siding or window replacements.
Just make sure you hire qualified contractors and roofers. Keep in mind, tax deductible home improvements have to add value. A roof or window that wasn’t properly installed does the opposite; it decreases the home’s value.
If you’re looking for a contractor, it might be worth considering Rogers Roofing. We consistently give quality service to our customers. To get a free estimate, you can call (219) 933-9145 or (773) 768-3022. We serve clients in Orland Park, IL, Crown Point, IN, as well as other parts of Northwest Indiana.