If you or someone in your household has a serious medical condition, you may find that you have to make modifications to your home for added safety and ease of moving around. Did you know you may be able to deduct the cost of making and maintaining these changes on your taxes?
What Home Improvements Can I Deduct?
If you want to deduct the cost of a home improvement, it has to be “medically necessary.” Basically, this means that you can’t deduct home improvements that are primarily aesthetic. The change has to improve the safety or functionality of your home for you or someone in your household.
That latter aspect is also key. Even if grandma comes over every week, you can’t deduct the cost of constructing a ramp to help her get in and out of the front door unless she lives with you. You can only deduct the cost of improvements made for someone who lives in your home.
Some common home improvements made for medical reasons include:
- Making doorway or hallways wider
- Adding rails or support bars outside or inside
- Adapting stairways or adding lifts to help access multiple levels
- Lowering or adapting storage areas, outlets, or household equipment
- Grading the outside property
- Installing or extending ramps
If you make these changes for someone in your household, you can deduct the cost of the original home improvement, as well as any ongoing repair or maintenance costs.
Don’t Deduct Too Much!
While there’s not a cap on how much you can deduct for a medically necessary home improvement, you have to make sure you take into account any increase to the value of your home.
In most cases, medically-related home improvements won’t boost your home’s value. However, it’s always possible. Therefore, you need to know the value of your home prior to any changes you make, and after.
If the value of your home goes up, you must deduct that amount from the cost of the improvement. The remainder is what you can deduct on your taxes.
To learn more about how to navigate this aspect of the tax code, call the pros at Taxation Solutions, Inc. today. We are here to help folks in Raleigh make informed decisions and maximize your tax benefits. Call us today for more information!