Step-by-Step Instructions on How to Take Advantage of Home Repair Tax Deductions

Step One: Determine whether your home repair is eligible for a tax deduction To take advantage of the home repair tax deductions, you need to make sure that your repair project qualifies. Generally speaking, any money spent on renovating, repairing or improving an existing residential structure (such as a house or condo) can be deducted from the taxable income you report to the Internal Revenue Service (IRS). The repairs must be necessary and must serve to maintain a structure’s value and livability. Cosmetic changes such as adding granite countertops will not qualify but floor or plumbing repairs typically would. Any alterations or improvements that increase the property’s value (such as an addition) are also ineligible for deduction. Step Two: Keep detailed records of expenses incurred This is perhaps one of the most important steps in taking advantage of home repair deductions; you need to keep meticulous records of any and all related expenses. Make sure to document either by wring down on a receipt when items are purchased and always retain those receipts – it only takes a few minutes but can prove invaluable when filing taxes. Record purposes for each purchase (e.g.: for installation of new window) on the receipt along with dates and costs involved if applicable. Also remember to save cancelled checks, bills, invoices as well other forms used during contractor services in order make sure all needed paperwork is available come tax filing time. Step Three: Figure out your itemized deductions This goes hand-in-hand with keeping accurate records because they both will help determine how much you get deduct when filing taxes each year Everything from appliances installed/repaired like dishwashers/furnaces/ water heaters, carpeting changes and major remodeling projects can be included in an itemized deduction so it pays off to record any known expenses ahead of time Step Four: Fill out Form 1040 Schedule A In order claim home repair tax deductions You will need fill out Form 1040 Schedule A– otherwise known as “Itemized Deductions”– list all relevant spending related repairs made throughout previous year For example, if got $20 long saw blade Feb 2017 start installing laminate flooring then include this cost schedule A under column marked “repairs” Step Five: Consult Your Tax Professional If unsure which specific regulations do/don’t apply particular set repairs being done best contact experienced local tax professional ensure getting biggest possible return Not every person same situation but experts able provide better guidance correctly file tax returns Moreover taking advice professional helps avoid overlooking possible channels savings reducing one’s overall burden