There are several federal tax credits homeowners can take advantage of for buying energy-efficient products.
Chicago, IL (PRWEB) March 14, 2015
When it comes to tax time, there is plenty of confusion regarding tax breaks, especially if taxpayers are also homeowners, according to The Federal Savings Bank. To ensure they pay the right amount during tax season and not more, homeowners should learn whether they will receive tax deductions from home improvement projects.
The following tips compiled by The Federal Savings Bank are ways to tell whether homeowners will be able to deduct home upgrades:
Know how to differentiate Between What Is Tax Deductible And What Is Not
According to Trulia, home repairs for aesthetic reasons are tax neutral - not tax deductible. While projects like patching holes in walls are not tax deductible, homeowners could deduct repairs that have been made in the event of a disaster because they spent money to ensure their properties were returned to their previous states. Homeowners can also deduct expenses for some upgrades to accommodate a disability, and the value of the deduction could hinge upon whether the project enhances the value of the home.
Consider Energy Saving Additions/Improvements That Are Tax Deductible
The U.S. Environmental Protection Agency's Energy Star program said there are several federal tax credits homeowners can take advantage of for buying energy-efficient products, including credits for solar energy systems and residential wind energy turbines. New and existing homes may qualify for this federal tax credit.
Additionally, homeowners should know that home improvement costs could also affect their taxes if their homes' values increased drastically after they had purchased the homes. Home improvements would add to the cost basis of the home and subtracted from the home's sale price. To ensure homeowners save the most money on their taxes, they should keep records of any and all home improvements to better keep track of costs and record details that could make them tax deductible.
Contact The Federal Savings Bank, a veteran owned bank, to learn more about mortgages.