There are a lot of good reasons to fix up your home, and saving a portion of the costs when you file your taxes is probably the least exciting one. But it sure is a smart one if you are wondering just how you can afford investing in your own home. Thanks to tax deductions for homeowners, the cost of upkeep isn’t always as high as it seems at first blush.
Whatever you are trying to do with your house – fix it up to resell or simply remodeling to your own tastes – you may be able to take advantage of various tax credits and deductions set forth by the IRS.
Tax credits for energy-saving home improvements can yield double the benefits of other home renovations. Government subsidies for homeowners make it easier than ever to afford an upgrade to your home’s power, heating, and other critical systems while moving your energy supply to a renewable source. Whether you chose solar, wind or other renewable energy, you can take advantage of some great tax credits.
If you are considering selling your home, investing in renovations has a twofold effect. Having a newly renovated home will command a higher asking price. Paradoxically, all the receipts from your home repair will be valuable to help lower your capital gains tax off any profit you made from the sale of your home.
Of course, selling a home is a relatively rare experience compared to home repairs and filing your taxes. Even if you plan on staying in your home and enjoying the renovations, keeping track of what you spend on your home is critical. Whether you choose to work with a tax professional or use a tax prep software such as Turbo Tax, having accurate records of what you spend on your homestead can help save you money. Get the information you need to make the most of your home renovation dreams.