Unfortunately no, you will not be able to deduct the costs for repairs. However, if this is a capital improvement, you will be able to add the cost of the improvement to the basis in your home.
There is also a credit and additional itemized
deduction that might be available to you for these capital improvements:
Your home improvements may qualify you for a
nonbusiness energy tax credit (depending on your specific tax situation)
Please refer to the energy
tax credit for more information.
To see if you are
eligible for a your home energy tax credit in TurboTax Online or Desktop,
please follow these steps:
- Once you are in your tax
return, click on the “Federal Taxes” tab ("Personal" tab in
TurboTax Home & Business)
- Next click on “Deductions and
credits”
- Next click on "jump to
full list" or “I’ll choose what I work on”
- Scroll down the screen until
to come to the section “Your Home”
- Select - Home energy Credit
and start. Let TurboTax guide you on entering this information.
Also you may be able to claim interest as an
itemized deduction if you financed this home improvement.
A qualifying loan is
one that is taken out to add "capital improvements" to your home,
meaning the improvement must increase your home's value, adapt it to new uses,
or extend its life. Examples of capital improvements are: adding a third bedroom,
adding a garage, installing insulation, landscaping and more.
Include this
home improvement interest expense under the same section as you would
Home Mortgage Interest.
To enter
your Mortgage Interest in TurboTax Online or Desktop, please follow these
steps:
- Once you are in your tax
return, click on the “Federal Taxes” tab ("Personal" tab in
TurboTax Home & Business)
- Next click on “Deductions and
Credits”
- Next click on "jump to
full list" or “I’ll choose what I work on”
- Scroll down the screen until
to come to the section “Your Home”
- Choose "show more",
then Mortgage Interest, Refinancing and Insurance
It is OK to show
your home improvement interest expense as mortgage interest under the 1098
section of Schedule A. Just keep a copy of your loan information with your tax
records, so if you are contacted by the IRS, you will just need to provide an
explanation of your situation (that your additional mortgage interest is
related to a home improvement loan and provide the IRS with the details of this
loan).
Additionally, if you are claiming a sales tax
deduction in your home state, you can include the sales tax paid on building
materials as a major purchase under this section.
A few things to
remember about this major purchase deduction, you will only get this extra
deduction if:
- The sales tax rate on this
major purchase needs to be the less than or same rate as your state's
general sales tax rate.
- You are taking the state's
sales tax deduction as opposed to the state's income tax deduction.
- You itemize on your return.
To enter this
transaction in TurboTax, log into your tax return (for TurboTax Online sign-in,
click Here and click on "Take
me to my return") type "Sales Tax Deduction" in the search bar
then select "jump to Sales Tax Deduction". TurboTax will guide you in
entering this information.
To enter your sales
taxes and major purchases in TurboTax Online or Desktop, please follow
these steps:
- Once you are in your tax
return, click on the “Federal Taxes” tab ("Personal" tab in
TurboTax Home & Business)
- Next click on “Deductions
& Credits”
- Next click on "jump to
full list" or “I’ll choose what I work on”
- Scroll down the screen until
to come to the section “Estimates and Other Taxes Paid ”
- Choose "show more",
then Sales Tax (start/update/revisit)
- Choose - continue to sales
tax and choose "Easy Guide"
- If your state sales tax
information is already entered you will need to edit it to enter your
major purchases information.
- On the screen that says
Major Purchase - select "yes"
- Enter your building material
information and sales tax here on the next screen.
