What Home Improvements are Tax Deductible? Amherst Resident Wonders

Home improvements made during the same calendar year as selling the home can offer some tax relief from any profit made during the sale.  For 2019 there is also one big tax credit for adding energy efficient systems to your home, including solar, geothermal or fuel cell technologies.  Improvements done to a home office are also tax deductible.

A homeowner in Amherst, NH was planning some home improvements for the coming year and wanted to see if this work would offer her some tax advantages.

Energy Efficiency Upgrades

Many tax benefits on energy efficient home improvements expired in 2013.  However, 2019 does offer one big tax credit for energy efficiency.  This is a one-time credit that allows you to write off a whopping 30% of the project, including labor and installation.  These energy efficient improvements are limited to solar cell, geothermal, wind or fuel cell technology added to improve your primary home’s efficiency.

Tax Deductible Home Office Improvements

Similar to business expense deductions, improvements or repairs done to your home office are often tax deductible.  This space does have some restrictions imposed by the IRS to ensure that it is qualified as a home office.  The area cannot be used by any other recreational purposes by yourself and your family.  If the home office does qualify, home improvements to this area are completely deductible which can save a substantial amount of money on your taxes.

The homeowner in Amherst found that the projects that she had in mind did not qualify for a tax deduction.  However after learning what does qualify, she is now considering doing some projects to enhance her home office.