Improving your home can be a great thing. You are making it into something that you can be proud to show off to your friends and family. You make changes that work for your life and make you feel more comfortable or even to help sell it later on if you want to move or use this as a means for retirement. There are many different options that you can choose when it comes to improving your home to make it a lot better, but some of the best ones that you can make, and even get some money back at the end of the year on your tax return, is energy improvements.
If you are considering doing some energy efficiency improvements on your home, it is important to talk to your tax professional. They will take a look at the improvement and help you to determine if this is the right option for you, how much you will be able to get back on your tax return, and even keep track of the receipts for you. Contact your professional to get started today.
Types of Home Improvement
There are a lot of different home improvements that you can do to your home, but not all of them are going to work for a deduction at the end of the tax season. In order to get these tax deductions, you need to do improvements to the home that are going to make it more energy efficient. Adding in carpet or putting in some new cabinets will not give you this deduction so don’t even try. But adding in some solar panels on the outside of your home to reduce the amount of electricity that you will use does count and you could save a lot of money if you claim these.
There are many energy efficient projects that you can do that will help to improve your home and make it more efficient on your utility bills. If you have done any of these projects through this tax year or you are considering working on them in the upcoming months, make sure to talk to your tax professional. They will be able to go through the information on the project and discuss with you whether this is the right course of action for your needs or not.
Limits
The limits are pretty flexible when it comes to this kind of improvement, although there are some key differences. To start, if you are doing an interior upgrade, there is a maximum amount you can claim. You are able to claim up to 30 percent of what you spend on the improvement, but you can only get up to $1500 back total. Anything above that is something that you are going to absorb on your own.
If you do some improvements outside, such as solar panels, you are able to get a bit more back. The amount of the deduction is still going to be that 30 percent, but there is no cap on the amount that you can get back. This means that for a really large project, you are still able to get that 30 percent back rather than having to worry about getting none of it back.
Figuring out whether an energy efficient home improvement project is worth your time and the money that you are going to spend is not always easy. Talk to your tax professional before getting started. They can help you learn how much you will be able to claim on the tax return for a deduction and will determine with you whether it is worth the time or if you have the right finances to do this.
Keeping Good Records
In order to get some of these improvement deductions, make sure to keep as good of records as possible. Many of the deductions on this are going to be large, and there are many people who are interested in trying to get them even though they didn’t actually do improvements to the home. The IRS is starting to look closely at these numbers to see if someone is doing the improvements or just trying to get through the system and make on nothing. But if you have the right records, such as receipts, check blanks for the project, and more, the IRS will be assured that you are actually doing the improvements for your home and not just lying about it.
If you need help keeping all of the records in place, you can contact your tax professional to help out. They can keep hold of the receipts and other information for you or go through all the information at the end of the year to help you get your tax return done the right way so you can get all of the deductions you deserve.
Adding energy efficient improvements to your home can make a big difference in many ways. It saves you money on the heating and electric bill each month, can help the house be worth more if you ever want to sell it, and you can even claim these as a deduction at the end of the year. When you are ready to get started on your tax return and want to learn how to make these deductions properly, contact your local tax professional to help out today.
