As a homeowner you may be asking, “Do I get a tax break for all the money I’ve spent fixing up my house?” The answer depends on the kinds of improvements you’ve made and how well you’ve kept track of your expenses. Here’s an overview of how home improvements can affect your taxes.
When you make a home improvement, such as installing central air conditioning or replacing the roof, you can’t deduct the cost in the year you spend the money. But, if you keep track of those expenses, they may help you reduce your taxes in the year you sell your house.
Improvements versus repairs
Money you spend on your home breaks down into two categories, tax-wise: the cost of improvements versus the cost of repairs.
You add the cost of capital improvements to your tax basis in the house.
- Your tax basis is the amount you’ll