Home renovations are generally not tax-deductible, in most cases, home renovations are considered personal expenses and are not tax-deductible. This means that you cannot deduct the cost of your home renovation from your federal income taxes. However, some home improvements may qualify for tax credits and we are here to tell you what we know.
Going Green!
While you can’t deduct the cost of home renovations from your taxes, you may be able to take advantage of tax credits for certain types of improvements. For example, if you install energy-efficient windows or solar panels, you may be eligible for a tax credit. Places like New Jersey have Solar Incentives for the purchase and installment of solar panels at your home! Be sure to check the IRS website or consult with a tax professional to determine if your home improvement project qualifies for a tax credit.
Business Expense
If you are self-employed and work from home, you may be eligible to deduct a portion of your home renovation costs as a business expense. This may include costs such as painting, flooring, or installing a new air conditioning system. It may even include mortgage interest, insurance, utilities, repairs, maintenance, depreciation and rent. To qualify, the renovated area must be used exclusively for business purposes.
Medical Purposes
Renovations for medical purposes may also be tax-deductible: If you are making home improvements for medical reasons (such as installing a wheelchair ramp or modifying your bathroom to be more accessible), you may be able to deduct the cost of those improvements from your taxes. However, you will need to meet certain criteria to qualify for this deduction, so be sure to consult with a tax professional.
Investment Property Renovations
And finally, renovations for rental properties may be tax-deductible: If you are renovating a rental property, you may be able to deduct the cost of the renovation as a business expense. This could include things like repairing a roof, updating a kitchen, or installing new flooring. Because the rental property is known as an investment property, money used to repair and renovate the home can be considered a business expense. For more information about what defines a rental property we found this article to help. However, like all things, you will need to meet certain criteria to qualify for this deduction, so be sure to consult with your accountant!
