Want to do some improvements inside the home but also want to save on tax? Here are simple ways one can save money on home improvements during the tax season.
According to House Logic, there are some things that the IRS looks at as a capital investment in the home, and these include some home improvements. Based on the law, capital improvements are home improvements that have to last for more than a year and add value to the home. Therefore, these are improvements which can prolong the life of the home. This can include a new bathroom or even a new water heater or furnace. It is also important to know where the line between improvement and repair is drawn.
Real Simple suggested some ways on how one can improve her home while saving up during the tax season. One can look into using alternative energy and incorporate it inside the home.
Home energy improvements are usually done to save on utilities like water and electricity bills. Aside from that, it was reported that one can get 100 percent of the cost of water heaters, central air conditioning systems and other items that use alternative energy resources.
However, it is important to learn which purchases can have limits on the amount one can earn. For alternative energy resources like solar panels or fuel cell equipment, one can score tax credit of 30 percent of its cost. Do not also forget that home office repairs or improvements are usually factors in the home office deduction calculation if you are conducting your business inside your home.
For large furniture like bedroom sets, entertainment sets and other items which can come with a hefty price, it is important to keep track of the sales tax that was paid on the big ticket items because these are allowed to be deducted in the statement income tax.
