Summer is the perfect time for tackling those home improvement projects you’ve been putting off. But did you know that some of those renovations could qualify for valuable tax deductions and credits? As an experienced accountant in Asheboro, NC, I am sharing the top tax breaks available for homeowners who complete energy-efficient upgrades, create a home office space, and make other key home improvements.
Energy-Efficient Home Improvements
One of the biggest tax incentives is the Energy Efficient Home Improvement Credit, which allows you to claim for a tax credit up to $3,200. This includes installing energy-efficient windows, doors, skylights, roofs, insulation, air conditioners, furnaces, water heaters, and more.
Beginning in January 1, 2023, the requirements for the residential Energy credit equals 30% of certain qualified expenses.
Requirements for the Residential Energy Credit include the following:
- Primary residence located in the US
- An existing, primary residence needing improvements. This excludes new homes.
- If the energy-efficient improvements are for a property used for business purposes up to 20%, you can claim the full Nonbusiness Energy Property Credit.
Home Office Deductions
If you’re self-employed or have a side gig, you could be eligible for the home office tax deduction. This allows you to deduct a portion of your mortgage interest, utilities, insurance, and other home expenses based on the square footage used regularly and exclusively for your home office.
Home Office Deductions are based on a percentage of the home devoted to the business. Some of the items included are…
- Mortgage interest
- Insurance
- Utilities, repairs
- Maintenance
- Rent
- Repairs
Other Potential Home Improvement Tax Breaks
Certain medical home improvements like installing railings or ramps may qualify for deductions if you itemize. Home renovations for energy conservation or renewable energy sources may also make you eligible for tax credits. And don’t forget loan interest from refinancing for home improvements could be tax deductible!
As you plan your summer renovations, keep track of expenses and project details. Gibson Tax ensure you maximize all the home improvement tax deductions and credits available based on your unique situation. Contact us at 336.414.2688 to schedule a consultation and get every tax benefit you’re entitled to in Asheboro!
