5 Home Improvements That Can Lower Your Taxes

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As you’re preparing your taxes this year, don’t forget to consider how your home might help you reduce your tax burden.

Homeowners who make various upgrades throughout the year can qualify for a variety of tax credits, as can folks who work out of their home. (If you’re looking to maximize your refund, you can also find a quick guide to tax deductions and exemptions here.)

Here are seven things to review to see if your home and its contents can help you get a tax break.

1. Solar & Other Alternative Energy Sources

If you’ve improved the energy efficiency of your home by installing any renewable energy sources, you could be eligible for tax credits to offset some of the costs. For instance, the Residential Energy Efficiency Property Credit offers a credit for installation of solar, wind, geothermal and fuel-cell technology.

2. New Doors, Windows & Insulation

The Nonbusiness Energy Property Credit provides a tax break for homeowners who make certain upgrades including insulation, exterior doors and windows.

3. A New Roof

Just like installing new doors and windows, a new roof can also get you a tax credit under the Nonbusiness Energy Property Credit. According to the IRS, it applies to “any metal roof with appropriate pigmented coatings or asphalt roof with appropriate cooling granules that are specifically and primarily designed to reduce the heat gain of your home.”

4. New Air Conditioning & Water Heating Systems

The same goes for these home necessities. The Nonbusiness Energy Property Credit provides a tax break for a number of home upgrades involving energy efficiency. A tax professional may be able to help you determine if specific projects in the aforementioned areas of your home qualify.

5. Major Appliances

Tax credits for Energy Star appliances are largely no longer available, but if you bought a new refrigerator, washer and dryer, or other major appliance, you’ll want to check the Energy Star Rebate Finder for info on the rebates your local utility might provide. If you’re planning to purchase a major appliance, you can also check that site to see which retailers near you participate in their programs

 

From Credit.com 2/6/16

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