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by Eric Slarkowski
In some situations you can take home improvement deductions on your taxes. This is a subject that is quite debatable, though, as standards and regulations are not too clear. What this means for the home owner is that it is best to just do home improvements because they need to be done and will add value to your home, not because you will get a tax deduction. However, there may be some very nice deductions you can take as an added bonus.
Spelling it Out
Getting a tax deduction for home improvements is a great deal. Home improvements will raise the value of your home so you are already getting paid to do them and with the added tax deduction, you are getting even more money in your pocket. Home deductions are not very easy, though. There are many reasons you can and can not take such deductions.
One reason for a deduction is medical reasons. If you must make changes to your home for a medical reason, such as widening doors for handicap access or installing an air conditioning for someone with breathing issues, then you may be able to take a deduction. This falls under the general deduction available for medical expenses. When you spend out over 7 percent of your income on medical expenses you get a tax deduction and that includes money spent on home improvement done for medical reasons. You may also get a deduction is you have to do remodeling for business needs. If you run a business out of your home then certain projects may qualify under business tax deductions. If you need to build an office or add a restroom for business needs, then this may qualify as a business expense That you can take as a deduction. In some cases you can also get a deduction for converting your home over to solar power. This is part of a move to try to reduce dependence on our current energy sources in favor of new, cleaner energy sources.
The bottom line is that there are an array of deductions you can take for home improvements, but they are not necessarily clearly spelled out. The IRS does not list them as actual home improvement deductions. Your home improvements should be made because they are needed or wanted and with the main goal of increasing the value of your home, not getting a tax deduction. You may end up finding out, once the work is done, that there are no deductions for which you qualify.
About the Author:
Eric Slarkowski frequently edits publications on issues relating to make your own dovetail joint and dovetail jigs. His abstracts on
dovetail jig reviews can be found on his website .
- Gas Prices Cause Mileage Adjustment Tax Deduction
Being notified the IRS has done something is usually a scary proposition. The number on fear of most people is an audit, but the IRS actually can be helpful. When taxpayers have a universal financial problem, the agency acts fast.
The United States is home to tens of millions small businesses. One of the favorite deductions of these businesses is the business mileage deduction. You get to deduct a certain dollar figure for every business mile you drive.
The cost of fuel would seem to be a major factor considered when the IRS sets the figure and it is. There are others however. They include things such as insurance, vehicle depreciation and other issues.
The agency notifies the public of the business mileage deduction figure a few months before the beginning of the calendar year. 50.5 cents was the magic figure set for 2008.
The business mileage deduction rate is a projection. When things happen that are not projected, the IRS can change it. When Hurricane Katrina took out refineries in the gulf, for instance, the IRS cranked the deduction up.
2008 has not seen a major hurricane, but fuel prices have exploded. One needs to only be reminded that in 2000, we were paying roughly $1.50 a gallon for gasoline on average across the country.
To its credit, the IRS has voluntarily stepped forward in reaction to the fuel price spikes. It has announced that it has the discretion to change the business mileage deduction rate and has set itat 58.5 cents for the last six months of 2008.
Practically speaking, how do we come up with our total deduction? Simple. Multiply your business miles incurred in the first six months of 2008 by 50.5 cents. Use 58.5 for the rest of the year and add the to figures together.
Business mileage deductions are not the only fuel issues involved. You can deduct mileage incurred if you have to move for a job. The IRS has also increased this rate by 8 cents to 27 cents a mile.
There is one other deduction we need to mention. You can deduct certain mileage incurred while working with a charity. This is set by Congress and cannot by adjusted by the IRS, so there is no change.
Gas prices are rising to the point where people’s conduct is being modified. A bigger tax deduction will not save you, but it certainly helps. Make sure to keep records of your mileage in case the IRS takes a closer look.
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