Clients who are homeowners often ask us how they can lower their tax liability. This answer is always complex, as you have to put in mind so many variables such as marital status, income, dependents, etc.
One of the recommendations we give for people who own homes that are at least eight years old is to simply fix it.
There are possible tax credits in repairing your home, and tax credits are better than deductions because that credit is a “dollar-for-dollar” reduction in what you owe, not a deduction on your overall income. This falls into what is called the Residential Energy Efficient Property Credit which can qualify you for up to a 30% tax break on things like geothermal water heating or solar panels installation. These upgrades serve to lower the fee for the home and the associated expenses of owning it.
There are other tax breaks you can take advantage of such as “qualified energy efficiency improvements” and “residential energy property costs”.
If you’re thinking about doing home repairs to your home, schedule an appointment with our financial advisors. We’ll review your home repair plans and tell you about tax breaks you and your family can take advantage of.