Darlees.com

The approach of spring often encourages homeowners to start considering home improvements & repairs. However, before you start getting out the hammer & nails or hiring a contractor consider if your home improvements may be eligible for a home improvement tax deduction.

The first thing the homeowner must understand is the difference between a home improvement & a home repair. Simply put, a home repair is classified as fixing a problem. By example, repairing a hole in the roof, fixing a leak or repainting a room would be actually considered repairs. On the other hand, remodeling a kitchen, adding a couple of rooms, building a garage or installing a swimming pool would be classed as improvements. There is more. These improvements add to the living amenity of the home’s owners & usually add value to the home.

The Internal Revenue Service sets out strict guidelines on how a homeowner can claim a home improvement tax deduction. It’s strongly recommended that before you hire a contractor or start any home improvement works that you obtain advice from you tax consultant or from the local office of the IRS

Tax deductions for home improvements can fall into any of many different categories. A medical condition that required providing disabled access to home would normally be classed as a home improvement.

There is a special home improvement tax deduction for victims of Hurricane Katrina. Consult with the IRS regarding the Katrina Emergency Tax Relief Act as it increases the permitted qualifying home improvement loans.

If you’re planning a home improvement to an area of your home that is in need of repair you may be easily able to include the repair as an improvement. The Tax Act states that where a repair is carried out in the same area of the home that is being remodeled then the repair can be included as part of the improvement project. OK. So, if you’re planning on remodeling your kitchen do not forget to take care of the leaking pipes at the same time & claim the entire project as a deduction.

Tax Credits vs Tax Deduction

Tax credits can also provide significant savings to the homeowner. Whilst a tax deduction for home improvement can reduce the amount of income on which tax is payable, a tax credit directly reduces the tax itself… Tax credits are available for many types of home improvements. By example, installing insulation, adding energy-efficient windows, & some types of highly efficient equipment for cooling & heating, & solar water heating may all qualify for tax credits.

The IRS has many help-ful publications to assist homeowners who are about to embark on home improvements so a visit to their website or calling into a branch office will usually provide the homeowner with a wealth of information.

And when you begin your home improvements remember to maintain accurate records of spending & save all receipts ? this will assist you enormously when the time comes to claim your home improvement tax deduction.

Alison Stevens is an on line author & maintains The Home Improvement Website to assist homeowners with home improvement tips & information

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.