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Kara
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Member since 3/07 13217 total posts
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They call me "Tater Salad"
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Re: Tax refund & home improvements
Posted by ave1024
Posted by bomb-blast
Posted by Kara
This seems to be a really widespread misconception that home improvements are deductible. The VAST majority of home improvements and repairs are NOT deductible. I'm not a tax professional, but I suggest people who are unsure contact a good one...
Maybe someone should post a PSA on one of the main boards! LOL
See they USED to be deductable and many people (mainly old schoolers) still think with the old laws.
But in 1997 when they changed the capital gains law, they allowed homeowners to take their first 250k on profit off their capital gains tax (500k for joint filers).
But nothing in this world is free. In exchange for this, the government did away with the home improvement tax deduction for itemizing. The only improvements you can deduct now are energy related.
Ah, that would explain why so many people think this way. Thanks!
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Posted 2/22/08 3:24 PM  |
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Long Island Weddings
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bomb-blast
bye bye
Member since 11/06 1327 total posts
Name:
Leo
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Re: Tax refund & home improvements
Posted by Kara
Posted by ave1024
See they USED to be deductable and many people (mainly old schoolers) still think with the old laws.
But in 1997 when they changed the capital gains law, they allowed homeowners to take their first 250k on profit off their capital gains tax (500k for joint filers).
But nothing in this world is free. In exchange for this, the government did away with the home improvement tax deduction for itemizing. The only improvements you can deduct now are energy related.
Ah, that would explain why so many people think this way. Thanks!
At one point even credit card interest used to be deductible. Heck, people even used to put their pets as dependents until the IRS started requiring SSN's for all dependents!
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| Posted 2/22/08 3:40 PM |
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Kara
Now Zagat Rated!
Member since 3/07 13217 total posts
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They call me "Tater Salad"
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Re: Tax refund & home improvements
Posted by bomb-blast
At one point even credit card interest used to be deductible. Heck, people even used to put their pets as dependents until the IRS started requiring SSN's for all dependents!
 about the pets!!
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| Posted 2/22/08 4:50 PM |
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LadyH
April Baby Girl is Here!
Member since 12/07 1077 total posts
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Re: Tax refund & home improvements
Posted by ave1024
Because the only home improvements that are deductable are improvements related to energy.
Improvements like kitchens and bathrooms add to your cost basis deduction for when you sell the house. QUOTE]
But if you used a Heloc or a 2nd mortgage to finance the home improvements, isn't that interest completly deductible? In that way, I think kitchens & baths or roofs (well the interest anyway) is deductible..... no?
Message edited 2/22/2008 5:41:03 PM.
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| Posted 2/22/08 5:40 PM |
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beautyq115
New Year!
Member since 5/05 13729 total posts
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Me
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Re: Tax refund & home improvements
we got a new boiler and HW heater...energy efficient...So that is tax deductible???? Please tell me yes
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| Posted 2/22/08 6:34 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
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That Led To The Wrong Tendencies
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Re: Tax refund & home improvements
Posted by LadyH
But if you used a Heloc or a 2nd mortgage to finance the home improvements, isn't that interest completly deductible? In that way, I think kitchens & baths or roofs (well the interest anyway) is deductible..... no?
HELOC interest is deductable no matter what you use it for.
You can technically go on vacation with your HELOC (not that I advise this), and your bank will issue you a 1098 for this interest to deduct.
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| Posted 2/22/08 6:57 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Tax refund & home improvements
Let me also add that you shouldn't go nutsy just because something is deductable.
Don't go out and do 50k of renovations and take 10 years to pay it off. Even though your HELOC interest is deductable, you are still PAYING THE INTEREST!  (and over 10 years that's a lot of $$$$$)
Pay cash if you can. Don't worry about the deductions.
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| Posted 2/22/08 6:59 PM |
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Kara
Now Zagat Rated!
Member since 3/07 13217 total posts
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They call me "Tater Salad"
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Re: Tax refund & home improvements
Posted by ave1024
Let me also add that you shouldn't go nutsy just because something is deductable.
Don't go out and do 50k of renovations and take 10 years to pay it off. Even though your HELOC interest is deductable, you are still PAYING THE INTEREST! (and over 10 years that's a lot of $$$$$)
Pay cash if you can. Don't worry about the deductions.
And of that interest, you're really only "getting back" cents on the dollar!
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| Posted 2/22/08 7:49 PM |
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Goobster
:)
Member since 5/07 27557 total posts
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:)
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Re: Tax refund & home improvements
I believe only if it is a rental property can you claim most home renovations. We did major renos and other than energy star items, nothing was used as a deduction.
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| Posted 2/22/08 10:27 PM |
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Goobster
:)
Member since 5/07 27557 total posts
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:)
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Re: Tax refund & home improvements
Posted by bomb-blast
Yeah, I don't understand what people are talking about. The only time general home improvements come into play with taxes is when you sell the home or if you own a home as a rental property. Aside from that, most home improvements are not tax deductible.
Yes this is true. This is my point as well.
Message edited 2/22/2008 10:29:22 PM.
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| Posted 2/22/08 10:29 PM |
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smdl
I love Gary too..on a plate!
Member since 5/06 32461 total posts
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me
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Re: Tax refund & home improvements
Posted by ave1024
Posted by Blu-ize
Qualifying capital improvements are those that increase your home's value, prolong its life, or adapt it to new uses. For example, qualifying improvements might include adding a new roof, fence, swimming pool, garage, porch, built-in appliances, insulation, heating/cooling systems, landscaping...
So if I add a new fence on my property you are saying that I can deduct this on my taxes? Where on schedule C do you put this?
I would love to know because if this is true, my CPA needs a swift kick in the ***.
I could not deduct my fence on my taxes. And I have a CPA too.
Things eligible are improvements towards energy (insolation, windows, doors, roof, etc...) and there is a $500 limit. You can't just deduct your home improvements. I wish!!!!
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| Posted 2/23/08 9:59 AM |
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LadyH
April Baby Girl is Here!
Member since 12/07 1077 total posts
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Re: Tax refund & home improvements
Thanks guys!
I have to admit... this post was pretty informative! Thanks to the OP for the topic!
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| Posted 2/23/08 11:51 AM |
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mcl916
my two loves
Member since 10/06 5133 total posts
Name:
Megan
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Re: Tax refund & home improvements
Oh that clears up a lot, I was pretty confused!! We were able to deduct our A/C that we put in, I think DH said we got a $300 credit becuase it was energy star. But we definately can't deduct the fence we installed or any landscaping we did.
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| Posted 2/23/08 5:13 PM |
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sleepie76
enjoying every minute
Member since 12/07 3881 total posts
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Re: Tax refund & home improvements
If this is your first year as a home owner, your big refund is due to the mortgage interest and taxes you are paying.
I bought an inground pool with ours. woo hoo! ok, I spent more than my tax refund...but the tax refund is my excuse for getting the pool and I'm sticking to it 
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| Posted 2/24/08 1:24 AM |
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bomb-blast
bye bye
Member since 11/06 1327 total posts
Name:
Leo
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Re: Tax refund & home improvements
Info regarding home improvements
Rebates and Tax Credits for Windows, Doors, and Skylights
General energy efficiency info
Federal Tax Credits for Energy Efficiency
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| Posted 2/24/08 9:35 AM |
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