Everyone wants to save money on their taxes. But most of the things we spend money on don’t help.
However, there are many things we can spend money on that are actually tax-deductible. Are home improvements tax deductible? after all, most homeowners spend a fair bit on their homes each year.
The good news is that there are a few home improvements that are tax-deductible, helping you to make your home more comfortable and more enjoyable, while eventually saving money on your upcoming tax return.
Wondering which tax-deductible home improvements you should prioritize this year? Keep reading our list of home improvements that are tax-deductible this year.
1. Solar Panels
Many energy-saving upgrades are tax-deductible, including the installation of solar panels. While solar installation is one of the biggest upgrades you can make for energy savings, it’s one of the most effective in the long term.
From day one, your electricity bill will be greatly reduced, if not eliminated entirely. So the savings kick in immediately.
There are also tax deductions and tax credits available for solar installations. While not a deduction, the federal investment tax credits are even better than a deduction.
This tax credit reduces your tax liability dollar for dollar, rather than just reducing your taxable income. That means more savings.
The solar tax credit will provide you with a 26% tax rebate on your solar installation if done in 2022, and 22% if done in 2023.
Want to learn more about installing solar panels in Washington, the greenest state in the nation? Head to https://blueravensolar.com/washington/residential-solar-installer-in-tacoma/ to learn more.
2. New Appliances
A smaller energy-efficient upgrade you can make is the replacement of appliances like a fridge, dishwasher, laundry machines, and oven.
By upgrading to energy-star certified appliances, you can enjoy a tax deduction and make your home more enjoyable to cook and clean in. Newer appliances will be more effective, less noisy, and longer-lasting than appliances of the past.
3. HVAC Improvements
HVAC upgrades, such as replacing your AC unit or furnace, can also qualify for tax deductions. Regardless of where you live in the country, you are likely using the AC or heater most of the year.
By upgrading to a more efficient unit, you’ll enjoy monthly savings and a tax deduction. In many cases, improving your home’s insulation can also qualify.
4. Home Office
More people are working from home than ever before. In 2022, 60% of employees who can do their job from home are choosing to work remotely full time.
For those who get to work from home full time, it pays to set up a proper home office. And doing so can be tax-beneficial as well.
If part of your home is used for work, that portion of the home, and all the expenses associated with it, are often tax-deductible.
Plus, if you make any improvements or purchase equipment for the home office, those might also be tax-deductible.
Making Home Improvements that are Tax Deductible
There are countless home upgrades you can make this year, but there are only a few home improvements that are tax-deductible when selling.
You should prioritize home improvements that are tax-deductible first, as they often make your home more efficient and less costly overall.
Looking for more household tips like this? Visit our blog now to keep reading.