You may have heard your friends say how they fixed up their windows for the big tax deduction, and want to know if you can improve your home security while getting a benefit from Uncle Sam while you are at it. The good news is that there are some tax benefits for some home improvements, but you need to know a few tips to get the best bang for your buck.
Tax Credits vs. Tax-Deductible are Different
Tax deductions are found in the section of your income tax forms that deal with common expenses that are often double-charged in the tax world. Things like medical expenses, commuting costs, property taxes, and charitable donations are found here. Tax Credits are offered for subsidized programs run by the government for education and energy-efficient improvements. Actions like buying Energy Star appliances, upgrading your insulation, or installing a power station for your electric car, are often found under Tax Credits.
Check for Local, State, and Federal Credits for Energy Improvements
The new solar panels you want to install may be eligible for tax credits this year, but the program may end next year. In order to take advantage of these perks, you will need to research current programs available at all levels of government from your city to the feds. If you live in a neighborhood that is undergoing a revitalization project you may find offers for upgrading your siding and replacing broken windows. It’s always worth asking.
Some popular tax credits currently available are:
- Insulation $500
- Energy efficient furnaces or boilers $300
- Solar water heaters 30% of the cost
- Roofs 10% of the cost
- Residential wind turbines 30% of the cost
Improvements for Medical Access are Deductible
Now, if a family member underwent a major change to their health so they now require a wheelchair, any improvement made to the home to help them access it will be deductible. However, you won’t be able to deduct the entire bathroom renovation, just the new roll-in shower. You will want to talk to a tax expert to verify what parts are eligible and which ones are not.
Your Mortgage can be Deductible
Now for the really good news. If you refinance your mortgage to cover the expense of completing major home improvements, the interest on the mortgage can be deductible, up to $100,000 a year. It’s possible to take out enough cash for that new kitchen without changing your monthly payment while your tax bill decreases with the higher interest payments you might make. Now that’s a smart way to add the privacy fence, upgrade the security system, and fix up the landscaping without leaving a big hole in your savings account.
Protect America reminds you that if you install a modern home security system, the costs are not only off-set with the tax-deductible benefits of a home improvement loan, but you can lower your home insurance premiums and help to reduce crime in your neighborhood — which could save you thousands in the long run.
If you would like more information about a wireless security system that you install but is supported by a reliable 24/7 remote monitoring center, check out everything that Protect America has to offer when you visit their website today.