In the summer, many of us take on home improvement projects, ranging from minor repairs to major remodeling. Though all home improvements cost money, many don’t improve the value of the home. Here are some ways to remodel your home while you recoup the maximum that you can, including some energy tax credits.
- Add space. Converting a storage attic into a bedroom, building an entertainment deck, or finishing a musty basement is a smart way to add usable square footage to a home, which will increase its livability as well as its resale value. You can even add a second story, enlarge the garage or create an extra bathroom for a busy household. With many families sharing space with other family members or roommates, having more bedrooms and living space is a definite plus.
- Increase curb appeal. Install a new front door with pizazz, redo an entry, landscape the front yard, paint the house, or replace worn siding. All these projects spruce up your home and give the exterior a fresh appeal.
- Remodel kitchen and baths. Up-to-date kitchens are always in demand, so replacing countertops and appliances can add a great deal to the saleability of your home. Likewise, bathrooms can sparkle with new fixtures, flooring, paint, and mirrors, at relatively little cost.
- Save energy. Replacing windows and doors that leak and adding insulation will save heating and cooling costs. These improvements may also save tax dollars. Starting January 1, 2023, you can garner an income tax credit of up to $600 for Energy Star-qualified windows and skylights and $250 per exterior door (up to $500 per year) for Energy Star-qualified doors. A new qualified water heater, furnaces, and hot water boilers, or central air conditioning may yield tax credits of as much as $600 per item. This credit is worth up to $1,200 per year for qualifying property placed in service on or after January 1, 2023, and before January 1, 2033. If you spread your home improvements over the 10-year life of this credit and receive $12,000 in tax benefits!
You can get a separate additional credit of up to $2,000 per year for replacing your qualified heat pumps, biomass stoves, and biomass boilers with a new efficient one.
- Go solar. Because they are so efficient, the government is offering a 30% tax credit for solar electric panels, solar water heaters, wind turbines, geothermal heat pumps, fuel cells, and battery storage technology (starting in 2023). There is no limit on the credit you can claim. You can claim the credit every year that you install eligible property until 2033.
Don’t worry about knowing these tax rules. Meet with a TurboTax Full Service Expert who can prepare, sign and file your taxes, so you can be 100% confident your taxes are done right. Start TurboTax Live Full Service today, in English or Spanish, and get your taxes done and off your mind.
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