A new article on the File My Taxes Online website explains how to take advantage of tax deductible improvements. Author Frank Ellis provides in depth tips into keeping records and getting prepared.
September 30, 2015 – “Tax Deductible Home Improvements for 2016” has been posted on the File My Taxes Online website. Author Frank Ellis reveals it’s essential to keep records of the costs of home improvements, as they can help lower taxes when the home is sold. Qualifying improvements include central air conditioning, sunroom installation, or roof upgrades.
Ellis explains the difference between home improvements and repairs. On a tax basis, a capital improvement is something that increases property worth or extends its lifespan. He also reveals that improvements don’t have to involve high priced items; even a storm window or intercom may qualify. Painting, window replacements, etc. are considered repairs which are not tax deductible.
Also noted is that, while at one time every improvement invoice amount was a potential deduction, today home sale profits are tax free most of the time. It’s still important to keep track, however. Right now, the initial $250,000 of profit on selling a home is tax-free. This applies to principal dwellings. Some experts have said recordkeeping is not as important, but if one owns a house for a long time, there are numerous aspects that need to be recorded. These include the amount paid for the property and the expenses of home improvements.
In addition to more insight on saving records, Ellis also discusses the importance of preparing a file of invoices and details on upgrades. This gives one an edge on having information available to the IRS and qualifying for any tax deductions later on. The author ends with a point about how TurboTax offers the appropriate schedules and forms using answers to simple questions.
To learn more about managing tax deductible home improvements in 2016, go to http://filemytaxesonline.org/tax-deductible-home-improvements/.
About Frank Ellis
Frank Ellis is a Traverse City Tax Preparation Planner and published author. He has written tax and finance related articles for eight years and has published over 900 articles on leading financial websites.
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