Home improvement projects can get pricey pretty fast, but they are one of those things that are necessary, especially if your property has seen better days. Not many homeowners have that kind of money lying around, so taking out a loan seems like the most attractive option. The good news is that you might qualify for a tax deduction on the interest paid toward your home improvement loan, depending on the situation. Innovative Roofing & Siding Inc., a leading roofing company, explains how these home improvement loans can affect your next tax day.
What percentage of interest in home improvement loans is tax-deductible?
It is indeed possible to deduct loan interest from a home improvement loan on your taxes, but the tax law passed in 2017 has some limitations:
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Your primary residence must secure the loan.
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The proceeds must be used to “substantially improve” the property that’s securing the loan.
Which home improvement project do you qualify for?
For your home improvement to be deemed eligible for tax deductions, the project must add value to the home, or at the very least, extend its long-term usefulness or adapt it for a new use. Some of these projects include:
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Complete roof replacement
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Adding a deck, porch or patio
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Adding a new room
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Installing HVAC units
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Indoor remodeling
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Adding new siding
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Building a swimming pool
As your trusted siding and roofing contractor, we will work with you throughout the process, making sure to keep you informed, as well as giving our professional opinion to your loan providers if necessary.
Keep in mind that repairs and routine maintenance don’t count for a tax deduction on loans, and you should always keep all the records of your home improvement transactions, especially these documents:
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The loan contract
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Escrow closing statements
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Receipts for work done on the home
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Form 1098 (the mortgage interest statement issued by the lender)
Here at Innovative Roofing & Siding, we pride ourselves on fast, reliable service and quality artistry. Merely search for a “roofer near me,” and you’ll see our website. Give us a call at (865) 444-6070 or fill out our contact form to get started with a FREE estimate. We serve people in Knoxville and its neighboring communities.