Taxes can be overwhelming and confusing. In fact, there are a lot of misconceptions that need to be cleared up. For any confusion about tax, the best thing to do is to consult a certified public accountant. Before hiring a kitchen remodel service such as Reliable Design-Build-Remodel, you should be familiar with the typical myths about remodeling and the home improvement tax deductions.
1. Mortgage interest Deduction is Gone
According to Tom Wheelwright, certified public accountant and CEO of WealthAbility.com, if your home was purchased before Dec. 15, 2017, you can still deduct all of the interest on loans of up to $1 million under the old tax laws. However, for those who purchased a home after Dec. 15, 2017 or those who plan to buy in the future, mortgage interest is still deductible; the deductible amount is capped at $750,000.
2. All Home Renovations are Deductible
Home improvements, including painting services and HVAC upgrades, are generally not tax-deductible unless the property serves as a rental unit. Fortunately, there are exceptions to this rule. If the modifications are intended for medical purposes, like adding support bars or building ramps, then tax can be deducted. Another exception is when renovations are made because there is a plan to sell the home. The remodeling expenses can be marked as “selling costs” and will be deducted as long as the modifications were made within 90 days of closing.
3. You Can Deduct a “Home Office” if you Work From Home
A requirement of a home office deduction is that your area must be the primary site of your business. If you transform your spare room into your dedicated working space, it can be tax deductible. Those who just occasionally work at home cannot claim tax deductions. In addition, only self-employed individuals can deduct their home office in any way.
Reliable Design-Build-Remodel is a full service general construction firm and remodeling contractor operating in the Birmingham metro and Jefferson and Shelby County areas and surrounding communities, including Birmingham, Helena, Chelsea, Mountain Brook, Hoover, Homewood, Montevallo, Alabaster, Vestavia Hills, and Pelham, with over 30 years of servicing our valued clients. Offering full service suite of general remodeling, design and build services. Our specialties include bathroom remodeling, kitchen remodeling, exterior renovations, interior renovations, painting, and more!
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