The short answer here is no, but there may be some expenses such as refinancing that will help you qualify for a deduction. Beyond renovation costs there are some expenditures you may be able to deduct. They just aren’t always considered renovations, but can still save you money.
Refinancing costs
If your renovation meant refinancing your home, certain expenses can be deducted. For example, if you purchased “points” to obtain your mortgage, the IRS will allow you to deduct the cost of these points over the life of the loan. For instance, if you paid $3,000 in points on a new, 15-year (180 months) mortgage, the IRS allows you to deduct $16.67 per month or $200 per year. Chump change? Yes, but a deduction nonetheless.
Interest payments
Interest payments can be deducted for your home equity loan or line of credit. However, the IRS places limits on the amount you can declare as home improvement — $50,000 for a single person, $100,000 for a joint filer reports Nolo. If you’re planning an expensive renovation, consider dividing it into two parts that will span different years.
Business expenditures
Not every improvement to your home qualifies as a renovation. For example, if you need to build new shelving for your office, that is a business expense, not an improvement. But, be careful: the IRS has a very narrow definition of business expenses — if something is used partly for business and partly for personal use, then you’ll have to determine a percentage and only deduct the amount used for business purposes only.
Capital improvements
Deductions you won’t realize now can be very helpful when you sell your home. For instance, if you put a new addition on your home, replace the roof, repave your driveway, install central air-conditioning or rewire your home, then these costs can be declared when you sell. Such improvements are added to the basis of your home, allowing you to exclude up to $250,000 of the gain on the sale of your home if you’re a single tax filer or $500,000 if you file jointly.
Clearly, confusion over home renovations and tax deductions can aggravate any homeowner. If in doubt, consult with a tax professional, keeping all of your receipts handy and deducting only what is allowable by law.
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