Tax Write-Offs That Are Available For Home Improvements

One of the biggest benefits to buying a home is that of the tax savings for you. You own a home now, so there’s no more monthly rental payments going out the window. All of your mortgage payments are going towards your financial future. There’s many different types of tax breaks that you can get from owning your home. Many home improvement projects that allow you an extra tax break are hiding right in the fine print! Tax breaks are known as “incentives.” These incentives are essentially what help people to get important things in their homes done without having a order placed on them. There are some hidden things that you may not have known could be used as tax write-offs.  

Energy Savings


From putting solar panels on your home to replacing appliances, there are certain tax breaks that you can get for making your home more energy efficient. There are lifetime caps on these deductions, but on a certain year, you’ll be able to save some extra money on your taxes. Some of the deductions that you might be able to claim include:

  • Air-source heat pumps
  • Biomass stoves
  • Central AC units
  • Water heaters
  • Certain energy-generation systems which include an array of things like water heaters, solar panels, fuel cell systems, wind turbines, and geothermal heat pumps.

You can deduct somewhere in the neighborhood of 30% of the cost of these improvements to your home. It doesn’t hurt to check on the updated standards that are introduced each year by the government. Your accountant can help you to understand your own deductions a bit more in-depth. 

Modifying Your Home For Medical Needs

If you need to modify your home in order to accommodate medical needs, you may be eligible for a tax deduction. The modifications must not increase the value of your home and be medically necessary. If the doctor tells you to lose weight and you put in a home gym, you can’t deduct that. If you need a ramp put in your home for wheelchair accessibility, then that can be deducted. The cost of the modifications generally has to exceed 10% of your adjusted gross income, or 7.5% if you’re over the age of 65. 

What’s Not Deductible

If you have done some major remodeling around your home, it’s sad to say that these improvements probably aren’t tax deductible. On the positive side, you will get a bigger return on your home when you do decide to sell it. This could help you to reduce any capital gains tax that you may have to pay on the sale of the home.

Remember that when you make improvements to your home, you’re doing it first for your own needs. Any tax write-offs that you may get are merely a bonus.

Establish a Home Improvement Budget

If you intend to list your house in the weeks to come, you may want to complete a wide range of home improvements. That way, you can transform your ordinary house into an awe-inspiring residence, increasing the likelihood of a fast, profitable home sale.

Although you may have lofty expectations for your home improvement projects, it is important to note that performing myriad home repairs can be costly. And if you’re not careful, you risk overspending to upgrade your residence.

Fortunately, it can be easy to establish a home improvement budget – here are three tips to help you develop an effective home improvement budget.

1. Determine Which Areas of Your House That You Want to Improve

When it comes to crafting a home improvement budget, it is important to differentiate between major and minor home repairs. By doing so, you’ll be better equipped than ever before to budget for assorted home maintenance projects.

A kitchen overhaul or bathroom renovation may be considered a major home improvement. Conversely, updating the color of your bedroom may be a minor home improvement. If you assess the major and minor home improvements that you want to perform, you can put together an appropriate budget.

Of course, you should take an objective look at you house to decide which areas that you want to improve. With an objective view, you can identify various home issues, determine how much money will be required to fix these problems and budget accordingly.

2. Examine the Home Improvement Funds at Your Disposal

In all likelihood, you only have a finite amount of money at your disposal. Luckily, regardless of how much money you have, you should be able to establish an effective home improvement budget.

Oftentimes, it helps to get multiple quotes from home improvement professionals. If you receive a variety of quotes, you may find that you can save money on home repairs, as well as stick to a tight home improvement budget.

It also may be cost-effective to complete simple home improvement projects on your own. If you possess the skills and know-how to perform quick, easy home repairs, you may be able to enhance your house without putting a dent in your home improvement budget.

3. Set Home Improvement Priorities

Priorities are important, particularly if you need to put together a home improvement budget. It generally is a good idea to set priorities for different home improvement projects. Then, you can allocate the necessary time and resources to complete home improvement tasks in order of priority.

If you plan to list your house soon, home improvements may prove to be exceedingly valuable. Home upgrades can help you differentiate your residence from the competition and enable you to achieve the optimal home selling results.

Lastly, if you need extra help prior to listing your residence, it may be beneficial to collaborate with a real estate agent. This housing market professional can put you in touch with top-notch home improvement professionals, offer home improvement tips and insights and much more.

What To Do Before You Refinance Your Mortgage

Refinancing your home can have many benefits. First, you’ll be able to take out money to address immediate needs in your home like improvement projects. These things can only benefit your home’s value in the long term. Before you take the leap to refinance your home, you should be sure that you’re actually ready to take this step. Knowing what you’re in for allows the entire process to go more smoothly. Read on for tip to understand more about the refinancing process and what you’ll need.

Know Your Finances

Just like when you initially purchase a home, refinancing your home will require you to have your finances in order. Take a look at your budget and needs and determine if it makes sense for you to refinance your home. For example, your employment status or distance from life goals like retirement could have a factor on the term of the loan you’re willing to take out. A 15-year mortgage may make more sense than a 30-year mortgage, but your monthly payments will also be a bit higher. You need to take all of this into consideration before you refinance. 

Your credit score will also be a factor in refinancing your home just as it was when you initially bought your house. Check your score and see if any red flags pop up. Getting these corrected earlier rather than later can help you to get a better rate on the loan. There are plenty of free services that exist online that allow you to check your credit score.   

Know The Value Of Your Home


If you know the value of your home and understand how much equity you’ve built up in the house, it will give you a better idea of your refinancing options. You can’t get more than 70% of what your home is currently worth as a cash-out refinance. If you owe more than your home is worth, you might be in a tighter financial situation than you realize. You can do plenty of things to increase the value of your home; it will just take some time. You may even consider selling your house, making a move, and starting from scratch. Financially, this could be the best option, and you could also end up with a better interest rate.

Getting your finances in order and the simple act of preparing for a home refinance could give you some insight into your financial picture after being a homeowner for some time.

Stay out of debt. Don’t open new accounts. Pay down any debt you may have. That is the standard advice for people who are trying to get in good financial standing before buying a home or refinancing a home. 

Do some research and find the best home loan refinance rates around. Then, look into your own finances and decide what’s best for you regarding refinancing your home loan.      

Be Prepared To Sell Your Home

Early autumn with modern residential single family homeSometimes, the unlikely event of selling your home can suddenly occur . You may not have ever considered moving away from your humble abode, but things happen, as they say. In any event, it pays in more ways than one to be ready; you never know when an opportunity may present itself for you to downsize, move to another area, or even to upgrade your living situation.

Stay on top of things: from time to time, take a walk around your house outdoors to check to see if any repairs are needed. Broken lights, chipped or loose caulking, or tears in the screens can and should be fixed quickly to prevent more costly repairs. Other repairs may require a professional, but you will save a lot of money if you attend to them quickly.

When you do put your home up for sale, home inspections can sour a great opportunity, and a bad report can be very costly and aggravating. A deal can fall through just because you failed to notice the small things that you could have been fixed beforehand. Be diligent; pay attention to those mostly little repairs to the outside of your home.

Cosmetic changes may be necessary to make your home more attractive to buyers. These can be anything from sprucing up your landscaping, to a simple freshening up of the outside of your home. Pick up trash; keep the weeds at bay. Cut the lawn. Broken or hanging eaves troughs, rippled shingles on the roof give the impression of neglect, making potential buyers shy away from looking further at your place.