Are Any Home Improvements Tax Deductible?
So, you're looking to add more room, more style, or a whole new interior to your humble home? Home improvement projects are always popular come springtime; however, they've skyrocketed since the pandemic hit. Because renovations and remodels can become costly, you've probably wondered if certain projects are tax deductible. As Tax Day approaches, we called upon Holden Lewis, home and mortgage expert at Nerd Wallet, to weigh in.
When it comes to home projects and tax write-offs, it isn't as simple as saving a receipt when donating clothing. "Let's say you take out a home equity line of credit to pay for renovations," explains Lewis. "You can take a deduction if you add your property taxes to the interest on your HELOC and primary mortgage, and the total is more than the standard deduction. That's for the interest on your first $1 million in mortgage debt, or $750,000, if you bought the house after December 15, 2017."
A second way to do a tax deduction for any home remodel is if it is to accommodate a disability. "Those that are made to accommodate a resident's disability," shares Lewis. "You can take a tax deduction on medical expenses that exceed 7.5 percent of your adjusted gross income, including the cost of paying for medically necessary improvements or equipment in your home. We're talking improvements like installing ramps and widening doorways and adding chair lifts."
If you're wanting to do any home revamps for tax purposes alone, it's best to speak with an expert first and consult with a financial planner.