Every homeowner has a wish list of improvements they’d like to make to their home. Unfortunately, finances don’t always allow for crossing all those items off the list. The good news is that whether you’re looking to tackle roofing replacement or a new home addition, you may be eligible to deduct home improvement loan interest from your taxes, which can make the project more attainable.
Legal Limitations to Your Tax Deductions
People often ask if the interest on home improvement loans is tax-deductible, and the answer is yes, subject to two main limitations as set out by the tax law passed in 2017:
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You can only secure the home improvement loan through your primary residence.
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You must use the proceeds of the loan to “substantially improve” the property that you used in securing the loan.
Which Home Improvement Projects Are Eligible?
Only home improvement projects that extend the long-term utility of a home, add value to the property or adapt it for a new use are deemed eligible for tax deductions. Some of these projects include:
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Roofing replacement
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Deck, patio or porch additions
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New siding installation
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New room additions
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Heating and cooling systems installation
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Indoor remodeling like kitchen, bathroom, and basement
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Building a swimming pool
Records to Maintain to Qualify Your Exterior Home Improvements For Tax Deductions
When applying for tax deductions on the interest of your home improvement loan, you will be asked to provide a number of documents. These include:
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The loan contract
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Escrow closing statements
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Receipts for work done on the home
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Form 1098
At Sterling Exteriors, we pride ourselves on fast, reliable service and quality workmanship for all your home improvement needs, including roofing. Give us a call at (513) 685-8055 or fill out our contact form to get started with a FREE estimate. We serve clients in Cincinnati, Loveland and Newtown, OH.
