How to Cut Tax Costs with Home Improvements

When most people make improvements to their homes, they’re doing it because they want a nicer, more comfortable home. In some cases, though, their home improvements end up benefiting not just them, but others as well. When that’s the case, these homeowners often qualify for some awesome deductions that can help them to save money and offset the costs of some of those improvements. Read on to learn about some great home improvements that could just earn you a tax break.  

Improved Energy Efficiency

If you’ve recently done something or are considering doing something to increase the energy efficiency of your home, you should know that the government approves While making your home more energy efficient can help your wallet, it can also help the environment, and the government likes to reward those who try and reduce their carbon footprints.

While there are many different tax credits related to energy efficiency, one of the best is the Residential Energy Efficiency Property Credit, which will give you a discount for installing solar panels, wind technology, geothermal units, or fuel-cell technology.

Check to see if your home improvement plans qualify, and, if so, make sure you take advantage of this great deduction.

New Water Heaters

Another home improvement that could earn you a tax credit is installing a new water heater. If that water heater is considered more energy efficient than your last model and/or meets certain other standards, there’s a good chance you’ll qualify.

Check with an accountant or with the appliance manufacturer to be sure, but definitely make use of this credit if you’re eligible; it’s worth it!

A New Roof

Finally, if you put a new and improved roof over your head, you’ll probably qualify for the Nonbusiness Energy Property Credit. In general, if the roof you install is designed to reduce a home’s heat gain, it’s good to go in terms of the credit.

As is the case with all of these credits, however, make sure you double-check before you file for the credit to avoid potential trouble or disappointment. As long as you’re careful, though, you can get some great home improvements and some great tax credits; talk about a winning combination!