Home improvement on your personal residence is not deductible unless it's an energy related home improvement which will enable you to take tax credits of up 30% (under the new Inflation Reduction Act -2022) of the cost of the item. This means if you install energy efficient property such as solar panels, solar water heaters, windows or doors you may qualify for the energy tax credit.
However when you sell your home, the cost of the improvements will be added to your adjusted cost basis which may reduce the profit on the sale and therefore less tax to be paid on the sale, if any.
Healthcare Tax Benefits
The tax law extends healthcare subsidies if health insurance is purchased in the Health Insurance Marketplace, further extending benefits that were expanded for 2021 and 2022 under the American Rescue Plan. Healthcare subsidies can help lower the health insurance premiums you pay and can also show up as a premium tax credit when you file your taxes if you don’t receive enough subsidy based on your income when you purchase health insurance in the Health Insurance Marketplace. The Premium Tax Credit is generally available to people with households between 100% and 400% of the Federal Poverty Level, but under the American Rescue Plan individuals with income above 400% of the Federal Poverty Level were eligible for the Premium Tax Credit for tax year 2021 and 2022 only. Under the Inflation Reduction Act these benefits will continue.
The law also caps Medicare beneficiaries out-of-pocket expenses for prescription drugs at $2,000 per year and will allow Medicare to negotiate some of the more expensive drugs on the market.
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