Hello Andrew!
Congratulations on your new home purchase, that is always so exciting!
Home improvements on a personal residence are generally not tax deductible for federal income taxes. However, installing energy efficient equipment on your property may qualify you for a tax credit, and renovations to a home for medical purposes may qualify as a tax deductible medical expense.
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.
This article addresses all these items and is a good reference to keep around, especially planning for any future sales:
https://turbotax.intuit.com/tax-tips/home-ownership/home-improvements-and-your-taxes/L6IwHGrx6 However, if you make any home energy improvements you may qualify for a credit in 2021:
The residential energy efficient property credit allows for a credit equal to the applicable percent of the cost of qualified property. Qualifying properties are solar electric property, solar water heaters, geothermal heat pumps, small wind turbines, fuel cell property, and, starting December 31, 2020, qualified biomass fuel property expenditures paid or incurred in taxable years beginning after that date. Only fuel cell property is subject to a limitation, which is $500 with respect to each half kilowatt of capacity of the qualified fuel cell property. Generally, this credit for alternative energy equipment terminates for property placed in service after December 31, 2023. The applicable percentages are:
- In the case of property placed in service after December 31, 2016, and before January 1, 2020, 30%.
- In the case of property placed in service after December 31, 2019, and before January 1, 2023, 26%.
- In the case of property placed in service after December 31, 2022, and before January 1, 2024, 22%.
Source:
https://www.irs.gov/newsroom/energy-incentives-for-individuals-residential-property-updated-question...I hope this helps make your planning go a little smoother!
-Dennis
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