Tax time is upon us! Love this article from House Logic on what you can deduct or claim as a credit related to your home.
Did you know you may be entitled to a deduction if you sell your home after making improvements?
Tax rules let you add capital improvement expenses to the cost basis of your home. Why is that a big deal? Because a higher cost basis lowers the total profit—capital gain, in IRS-speak—you’re required to pay taxes on.
The tax break doesn’t come into play for everyone. Most home owners are exempted from paying taxes on the first $250,000 of profit for single filers ($500,000 for joint filers). If you move frequently, maybe it’s not worth the effort to track capital improvement expenses. But if you plan to live in your house a long time or make lots of upgrades, saving receipts is a smart move.”
For more information on this deduction and others, read the full article here.