Are home improvement costs tax-deductible?
Tax-favored home improvements range from replacing windows and doors, to adding insulation or special roofing material, to converting heating and cooling systems to solar power. The best thing about these tax breaks is that they are credits, which reduce IRS bills dollar for dollar. And while some credits are phased out once a taxpayer earns a certain amount, these credits are available to any homeowner, regardless of income. You can include as medical expenses amounts you pay for special equipment installed in a home or for home improvements when the main purpose is medical care for you or your spouse. You can then deduct these amounts as long as you follow your doctor’s orders and the IRS’s rules. When claiming medical deductions, both the medically necessary home improvements as well as the more run-of-the-mill health care costs must be itemized on Schedule A. And only the amount that exceeds 7.5 percent of your adjusted gross income is deductible.
