About two years ago I did a cash-out refinance ($20,000) intending to use the money for some remodel projects. Unfortunately, some unexpected bills delayed those projects. I understand that the interest for the cash-out part of my new mortgage is not tax deductible unless it is used for IRS approved home improvements. So, for my 2020 taxes, when TurboTax asked how much of the loan went towards the purchase or improvements of a home, I entered an amount that was $20,000 less than the total loan amount (i.e., the amount to payoff my original home loan).
I'm trying to figure out if there is a deadline for when money must be spent on home improvements to qualify for mortgage interest deductions. For 2021, I had enough money for a $10,000 remodel project. So, for my 2021 taxes, when TurboTax asks how much of the loan went towards home purchase or improvements, can I add $10,000 to the amount I entered in 2020? Can I do the same, lets say 3 years from now, when I able to get to my next remodel project?
Thanks!
