Are Home Improvements Tax Deductible In Texas
This question comes up most often. If you are a homeowner in the Houston Texas metro are and you want to know if your home improvement is tax deductible, you will find this page most helpful. Here at Texas Home Exteriors we are often asked this question while we are working on homeowners homes for exterior home improvements scutch as siding, roofing or replacement windows.
Your Primary Residence With No Portion For Office Or Business The Answer Is No
If you use your home as 100% your personal residence, without any portion for business then you cannot deduct the cost of home improvements. These costs are nondeductible personal expenses that you can not deduct.
However You Will Gain With The Increased Value Of Your Home
Like any other home improvement that you can think of, this will increase the value of your home. Yes you will have to pay the tax in the increased value, however the IRS will let you role that money into another home should you decide to sell without paying any capital gains tax with a 1031 exchange. We will talk more about this option latter on.
What If You Use A Portion Of Your Home For Business
Since home improvements are not tax deductible there is a helpful option. Since you can’t deduct 100% home improvements, it is possible to depreciate them. What his means is you deduct the total home improvement cost over a specified length of time. This can be anywhere from three to twenty five years. To qualify for the tax break, you have to depreciate home improvement costs. This means that you must use a portion of your home other than as your main personal residence. Like 20% for an office space. This is also call a home office deduction.
Renting A Portion Of Your Home
Lets say that you rent out a space in your home for extra income. This is yet another way that you can depreciate the expense as a rental expense. This amount is deducted from the rental income that you will be receiving. If you are using the home office deduction, improvements that benefit only the portion of the home being rented can be depreciated in full. Lets say you have remodeled an office space, that space can be 100% deductible. Improvements that benefit the entire home can be depreciated according to the percentage of rental use of the home.
Improvements that qualify as medical expenses are tax deductible
So let’s say that you are handicapped and you need your doorways widened in areas such as the front and back doors of your home. Bedrooms and bathroom door widening all qualify as well. Showers, bath tubs and lowering cabinets are other home improvement renovations that should qualify.
Helpful Home Improvements & Renovations Tax Deductible Links
We hope that you have found this article what home improvements are tax deductible helpful. Thank you from all of us at, Texas Home Exteriors INC.