Unfortunately there is no deduction for capital improvements to your personal residence.
However
, you will be able to
increase the cost basis in your home by the amount of these capital improvements
.
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 this link for more information about this credit:
https://turbotax.intuit.com/tax-tools/tax-tips/Home-Ownership/Which-Home-Improvements-Qualify-/INF12...
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
- 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, 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 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 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. (screenshot)
As
noted above: you are only allowed the major purchase additional sales tax
amount if the sales rate you used for your general state sales tax rate is the
same sales tax rate on your major purchase.
So if
you used a 8% general sales tax rate for your state, this would have to be the
same sales tax rate for your building material purchases. Just make sure that
when you enter this information under the "Major Purchase" section,
that your sales tax divided by your cost is your general state's sales tax
rate.
