Repairs that benefit your entire home are deductible according to the percentage of home office usage. For example, if you use 20% of your home as an office, you can deduct 20% of the cost of repairing your home's heating and cooling system. If you use your home solely as your personal residence, you cannot deduct the cost of home improvements. These costs are non-deductible personal expenses.
Under the current US federal tax code, home improvements are generally not tax-deductible. Home improvements that are medically required for you or any member of your family who lives with you may also qualify as tax-deductible. Examples of this include widening doors, installing ramps or elevators, lowering cabinets, and adding railings, Washington says. In this case, you would have to itemize your tax deductions to take advantage of the cancellation, he adds.
Home office improvements are deductible over time with depreciation, and repairs are deductible within the tax year in which they are completed, as they are deemed necessary for the maintenance of your business. While most home improvements aren't tax-deductible, they could generate tax benefits when you're selling your home. The good news is that if you qualify for this tax exemption, both repairs and improvements may be eligible, as long as they are only in the parts of your home that are used for business. A repair is something that keeps your home in good working order, such as fixing a leaky faucet or replacing a broken window.
However, if the repair adds value to your property (such as replacing the roof), it could be considered a home improvement. Mark Steber, director of tax information for tax preparation company Jackson Hewitt, told The Balance in an email that home repairs such as fixing gutters or painting a room are considered general maintenance rather than capital improvements. Although home improvements may not qualify for a tax deduction, Steber recommended keeping detailed records of your expenses related to any home improvement. Several types of home improvement projects may be eligible for a tax cancellation, but it ultimately comes down to the type of remodel you are completing and whether it is classified as a repair or improvement.
Even if you don't plan to sell your home next year, it's important to thoroughly document any tax-deductible home improvements you make along the way so you can get the most out of your improvements when the time comes. While home improvements with garden variety won't give you a tax deduction right now, they could be helpful in reducing taxes if and when you sell your home. The two basic requirements that qualify for home office improvements for a tax deduction are regular and exclusive use and that your home is the primary place of your business.