Home Improvements that Can Give You a Tax Break
The Super Bowl is over, Valentine’s Day is over, and despite the fax that the groundhog saw his shadow, it seems that our Chicago winter has been relatively mild as far as winters go. Spring is definitely in the air. And spring means. . . . .tax season.
As you get ready to do your taxes this year, keep in mind you may qualify for some tax breaks you didn’t expect. If you have made certain home improvements, they may pay off in more ways than one. For example, installation of the any of the following energy efficiency items or appliances make your home more green and save you some green at the same time:
- Central air conditioning can get you a $300 credit.
- Insulation can save you up to $500, or 10% of what it costs – whichever is less.
- A solar water heater can save you 30% of whatever installation and materials cost.
- A regular (not solar) energy efficient water heater can save you $300.
- For a new roof, you get to deduct 10% of the cost, up to $500.
- A residential wind turbine can save you 30% of its cost when it comes time to file taxes.
- A residential fuel cell can save you 30% of whatever installation and materials cost.
- You can get $150 credit for a new gas, propane or oil hot water boiler.
- You can get $150 credit for a new gas, propane or oil furnace.
- You can get a $50 credit for main air-circulating fan.
- You can get approximately a $300 credit for a biomass stove unit, as long as it has a thermal efficiency rating of at least 75%.
- An air source heat pump will get you a $300 credit
- A geothermal heat pump can save you 30% of installation and materials.
- You can deduct up to $500 for new doors.
- You can deduct up to 10% of the cost, up to $200, for new windows and skylights.
Other improvements, necessitated by medical reasons, can also be deducted if you itemize your taxes and they cost more than 10% of your adjusted gross income. For example, if you make home improvements for yourself, your spouse or any dependents because one of you is disabled or in a wheelchair. It may be deductible. Examples of these types of home improvements are making your home wheelchair accessible, installing a lift, or adding a grab bar in the shower or handrails. And if you’re over 65, you may be allowed to deduct your medical expenses also, if they are greater than 7.5% of your adjusted gross income.
This should by no means by construed as tax advice, and I am not a tax attorney. Your taxes should be discussed with a qualified accountant who can guide you on which deductions you qualify for individually, and how much you can actually claim.