Certain home improvement expenses, like energy efficiency improvements, medical improvements, or improvements aimed at increasing your home’s resale value might be tax deductible.

In addition to home improvements, certain home repairs to home offices and rental properties may also be tax deductible under certain circumstances.

There are plenty of ways to deduct qualifying home expenses on your taxes, but it’s hard to track them down if you don’t know about them. That’s why the

car and home insurance

comparison app

Jerry

is here to give you the rundown on common home improvement expenses that may qualify for tax deductions.

Let Jerry find you the best homeowners insurance policy for your needs

* checking your rate won’t affect your credit score

Shop Now

* checking your rate won’t affect your credit score

Are home improvement expenses tax deductible?

Under the right circumstances, home improvement expenses can be tax deductible.

Whether your latest home project is tax deductible will typically come down to whether it would be classified as an improvement or a repair, as well as the ultimate purpose of the project.

Improvements vs. repairs

A repair would be a project that would restore your home to its original pre-damaged state or value. That might look like replacing a burst pipe or a cracked siding panel, fixing a gutter, or patching up a hole in your drywall and repainting.

So, is home repair tax deductible? In most cases,

repairs

to your home aren’t going to be tax deductible. However, under certain circumstances, there are a couple exceptions to that, like if the repairs made were to a home office or a rental property.

An improvement, on the other hand, would be considered a project that adds value to your home. That could include installing new siding, replacing a furnace, or putting on a new addition.

While not every improvement project will be—for the ones that are eligible for tax deductions, some may be deductible the same tax year you pay for them, while others aren’t tax deductible until the year you sell your home.

MORE:

Can you negotiate upgrades on new construction homes?

Capital improvements for your home

Capital improvements are improvements made to your home that increase its resale value. These improvements can become tax deductible after you sell your home—which makes it important to keep those receipts in a place you can find them when that time comes around.

Examples of capital improvements include:

Replacing a furnace

Finishing an attic or a basement

Building an addition

onto your home

Installing a new roof

Adding a deck or balcony

Installing a security system

Installing a swimming pool in your backyard

Pro Tip The first $250,000 of profit on a home sale of your main residence is tax free for single filing taxpayers, while for those who are married filing jointly, that amount is $500,000. Profits after those amounts could be subject to tax.

Improvements for medical care

If you need to make changes to your home due to your medical needs, or the medical needs of a spouse or dependent, you might qualify for a tax deduction on those expenses. Improvements made to your home out of medical necessity can be tax deductible the year you make them.

Examples of tax-deductible home improvements for medical care include:

Entrance and exit ramps

Bathroom support bars and/or accessible bathtubs/showers

Installing lifts to get up and down stairs

Widening doorways and/or hallways

Lowering counters or cabinets

Adjusting locations of outlets

House-wide handrails

Pro Tip Some improvements for medical purposes will also increase your home’s overall value, in which case that portion could count toward capital improvements, while the remaining expenses can be counted toward the medical expense deduction.

Improvements for energy efficiency

If you’ve made certain energy efficiency improvements to your home, you could be eligible for renewable energy tax credits.

Those

improvements

could include installations of solar panels, geothermal heat pumps, residential wind turbines, fuel cells, and biomass fuel stoves.

The available tax credits are:

26% for systems placed in service after December 31, 2019 and before January 1, 2023

22% for systems placed in service after 12/31/2022 and before 01/01/2024

Both existing and new construction homes qualify.

MORE:

How to decipher home insurance quotes

Improvements for a home office

If you’re self-employed, you have a home office that’s exclusively dedicated to your business, and you qualify for the home office deduction, repairs that are done directly and exclusively to your home office space can be fully or partially tax-deductible.

Repairs that would benefit your whole house, like repairing a furnace, could also be partially tax deductible. For example, if your home office makes up 15% of your home’s total space, 15% of the cost could be deducted.

Improvements for a rental property

Repairs can be tax deductible for a rental property when they’re made to keep the rental property in good working condition and can be deducted during the tax year when they’re made.

However, things get a little more complicated with rental properties when improvements are made. Improvement expenses made to rental properties aren’t tax deductible. “The cost of improvements is recovered through depreciation,” says the

Internal Revenue Service

(IRS).

If you rent out a portion of your own home, it’s possible you could deduct some qualifying improvement expenses from rental income you’ve gotten. Typically, the deduction is going to be proportional to the amount of space in your home that’s rented out (similar to the home office deduction).

The IRS guide to business expenses, including improvements made to leased property, can be found

here

MORE:

How to bundle home and auto insurance to save money

How to save money on home insurance

Finding multiple home insurance quotes can help increase your odds of getting a good rate for the level of coverage you’re looking for. With the

Jerry

app, finding and comparing those home insurance quotes is easier than ever!

Never used Jerry before? Here’s how it works. Once you’ve downloaded the app, you’ll just enter your information, which takes under a minute, and in an instant, you’ll see competitive home insurance quotes from top providers, all in one spot, right at your fingertips.

If you’re looking for additional savings, you can also bundle your home insurance with your

car insurance

Once you’ve picked the right insurance for you at the right rate, Jerry can even help you with setting up your new policy and canceling your old one. Later, when your policy’s up for renewal, Jerry can automatically find you new quotes to help you make sure you’re still getting a good rate.

No wonder Jerry’s the #1-rated insurance app!

“
Jerry
was wonderful! I used it for my auto and renters policies. I trusted it so much that I signed up my homeowners insurance under Jerry as well. All of the agents are amazingly nice and knowledgeable.” —Mary Y.

FAQ

Can you write off home expenses on taxes?

Under the right circumstances, there are plenty of ways to write off home expenses on your taxes. Certain improvements, like energy efficiency improvements, medical improvements, or improvements aimed at increasing your home’s value can potentially become tax deductions. Repairs made to home offices or rental properties could be tax deductible as well.

Save an average of 18% by bundling your home and auto insurance

Bundle your home and auto insurance with Jerry and save!

Try Jerry