When springtime is on the horizon it's always a great idea to start making home repairs and improvements. Before you go to your shed and start bringing out the hammer and nails; consider this, your house may be eligible for a home improvement tax credit.
There is a difference between home repair and home improvement. Basically a home repair is fixing a problem with your home. An example would be if you repaired or replaced damaged or missing shingles, replaced a leaky pipe or repainted a room in your home.
Now on the other hand, if you added a new room, replaced windows, remodeled your kitchen or installed a new door, these would be classified as improvements. You can think of it this way, home improvements add value to the home and to the living amenities of the homeowner.
The IRS has strict guidelines when it comes to claiming your tax credit and deductions for home improvements. It's a good idea to find out what home improvements qualify for a tax deduction before starting a home improvement job.
Tax Deductions vs. Tax Credits
As a homeowner tax credits can save you a fortune.
A tax credit will directly reduce the tax you'll have to pay. While a tax deduction will reduce the payable amount of income on the tax. (Stay with me here!)
There are several different available tax credits for your home improvement projects. These are some common examples of what will qualify for a tax credit:
Make sure you keep all of your receipts when you begin your home improvements as well as accurate records of all your spending. When you go to claim your home improvement tax deductions these records and receipts will save you a lot of time and headaches.
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