Whether you just completed home renovations in 2018 or are considering updating your home in 2019, remember to make note of these changes as you prepare your tax returns. Several types of upgrades to your home might qualify for tax benefits, so talk with your tax preparer about any modifications you made or plan to make.
In the meantime, consider the following basic tax benefits you might be eligible for.
Energy Conservation Initiatives
If you made changes to your home that improve its energy efficiency, keep those modifications in mind when tax time rolls around. Many states offer energy efficiency tax incentives, such as sales or property tax exemptions.
Tax laws change often, so consult with your tax preparer about any incentives available for residential energy conservation improvements you made to your Arizona home. Some of the home improvements you will want to talk with your tax preparer about include the installation of more energy-efficient doors, windows, skylights, air conditioning, and solar water heaters.
Tax Benefits for Universal Accessibility Modifications
Updates to your home for accessibility purposes are often eligible for tax benefits. Such upgrades could include installing wheelchair-accessible ramps, widening doorways, installing a porch lift, lowering kitchen cabinets or appliances, and adding grab bars and other security features in a bathroom.
Home Improvement Loans
Taxpayers can often deduct interest on a home equity loan, home equity line of credit, or second mortgage.
According to the IRS website, “The Tax Cuts and Jobs Act of 2017 suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit, unless they are used to buy, build, or substantially improve the taxpayer’s home that secures the loan.”
For example, the interest on a home equity loan used to build an addition to an existing home is typically deductible. The loan must be secured by the taxpayer’s main home or a second home that is considered a qualified residence, according to the IRS.
For more information about the possibility of tax benefits in relation to improvements to your Arizona home, consult your tax preparer. If you’re ready for a home renovation consultation, contact us through our JK Cabinets & Design website or by phone at (480) 219-9580.