Five Most Overlooked Home-Related Tax Deductions
By Marygrace Murphy

 

Disaster-related expenses
After several severe weather events this year, you might be wondering if you can claim any disaster related expenses.  In IRS terms, casualty losses can be claimed only if they are the result of a sudden, unexpected, and/or unordinary event – that would include a loss due to fire, tornado, or flooding. Property loss or damage due to gradual deterioration, such as termite infestation, is not deductible as a casualty loss.

Insurance reimbursements reduce the amount of any loss, so any insurance settlements you got will need to be taken into consideration.  If you expect to get reimbursed for a loss, do not claim a casualty loss deduction. However, if you find out the item(s) is not insured,  you can deduct the loss.

Moving expenses
Home buyers and sellers who are moving at least 50 miles from their last address and who are moving within one year of starting a new job may be able to deduct moving costs, storage costs, or moving-related travel costs such as lodging and food. To qualify, you will also have to prove you’ve worked at least 39 weeks at your new job once the move is complete.

Home improvements
In the eyes of Uncle Sam, “home improvements” are generally defined as expenditures that increase the value of the home or extend its life. However, home improvements are not deductible in the year you make them. Instead, they must be “capital improvements” that increase the value of your home, such as a remodeling job, a new bathroom, new kitchen, etc.

Energy tax credits
Energy-efficient home improvements are usually the most deductible. Homeowners who upgrade their properties with energy-efficient heating or cooling systems, windows, doors, insulation, and other systems designed to reduce energy waste may be eligible for tax credits. Those who use solar energy or other alternative energy systems may also be eligible for breaks.  To learn which improvements qualify, visit www.energystar.gov and search “tax credits.”

Home office
Homeowners can deduct a percentage of their home’s costs proportionate to the percentage of the home that they are using as a home office. For example, if you use 10% of your home as a home office or to run a home-based business, that means you could deduct, for instance, 10% of electrical bills. You can also deduct for repairs, renovations, furnishings or other expenses related to the home office space.

Copyright 2018 All Rights Reserved. Reprinted with permission from Squeaky Door Productions, Inc. t/a Money Pit Media. For more money saving home improvement ideas and tips, visit moneypit.com, and while you’re there, sign up for Tom & Leslie’s free weekly eNewsletter