It’s not unusual for homeowners to wonder whether certain home improvements can be deducted. And if so, under what circumstances?Regular home improvement projects involving siding contractors in Bellevue, WA, don’t typically qualify as tax deductions. Under certain conditions, some upgrades can be deductible.
Deductions or not, when property owners need a home siding contractor in Bellevue, knowledge and experience are key.
Let’s look more closely at when home upgrades can and cannot qualify as tax deductions.
Personal Residence Improvements & Federal Income Tax Law
Homeowners are usually unable to deduct the costs of home improvements to their personal residences from their federal income taxes. This includes work from a Bellevue siding contractor, kitchen remodels, new patios, etc.
There are exceptions, such as medical reasons and energy efficiency-boosting updates, that make homeowners eligible for tax credits.
There are exceptions, such as medical reasons and energy efficiency-boosting updates, that make homeowners eligible for tax credits.
Types of Home Improvement Tax Breaks
Some specific home additions can lead to different types of tax breaks for homeowners.
Refundable & Non-Refundable
Homeowners may be entitled to a refund when their deduction is greater than the total income tax owed. Other credits are non-refundable, so they can only reduce the taxpayer’s liability to zero. In some cases, they can be applied to taxes owed for preceding or following years.
Example 1
Some credits are available as part of energy efficiency initiatives. For example, green features like solar panels allow homeowners to claim a credit on their taxes.
For vacation homes and primary residences, qualifying energy-efficient home improvements made after 2019 and before 2023 entitle homeowners to a non-refundable credit of 26% of the cost.
For vacation homes and primary residences, qualifying energy-efficient home improvements made after 2019 and before 2023 entitle homeowners to a non-refundable credit of 26% of the cost.
Example 2
Medical purposes are another example of home improvements that can be tax deductible. When expenses to diagnose, treat, mitigate, or cure a disease exceed a certain percentage of an individual’s taxable income, the IRS grants deductions.If a taxpayer or a dependent of theirs is physically disabled and special equipment is installed as a substantial home improvement to aid with the disability, the medical expenses claimed can include the cost of the home addition. Some equipment and modifications that typically qualify are accessibility features like widened doorways, ramps, handrails, and lifts.
When certain home additions like medical equipment installation can be deducted, it lowers the individual’s taxable income and liability, which can lead to significant savings. These cases tend to involve serious conditions, as the write-off requires the expenses to first reach 7.5% of one’s adjusted gross income.
When medical equipment installation raises a home’s overall property value, it may only warrant a partial deduction. The IRS website can better explain the qualifying medical deduction parameters.
Contact a Home Siding Contractor in Bellevue, WA
In the long run, every home improvement effort by a siding contractor in Bellevue will ultimately contribute to increasing the value of the homeowner’s investment, allowing for greater capital gains whenever they sell the property.Generally, tax breaks for standard home improvements are illegal under the IRS tax code unless they meet certain requirements, like energy efficiency rebates and medical expenses.
Although it’s unlikely to be tax deductible, whenever a qualified Bellevue siding contractor is needed, count on licensed, top-rated professionals to achieve excellent results.
Although it’s unlikely to be tax deductible, whenever a qualified Bellevue siding contractor is needed, count on licensed, top-rated professionals to achieve excellent results.
