Tax saving Home Improvements

ARE YOU spending money to improve your house? Be sure to keep track of exactly how much you are paying. When the time comes to sell your house; you should be able to get significant tax deductions. Not only can some renovations boost the price of your home, but the Internal Revenue Service might count them in the total cost of your residence.

When you sell your house, you usually have to pay a tax on any profit the difference between what the house originally cost you and what you sell it for. But the IRS will let you include in your cost the price of major improvements made after you bought the home. And the higher your total cost, the lower your profit and the lower your taxes.

For example, if you have put in some new shrubs or trees or a lawn, a new fence or a porch, you can list any or all of them as part of the total cost of your residence. Many internal improvements count as well: storm windows, lighting fixtures, air conditioners even wall to wall carpeting is recognized by the IRS. So are termite proofing and waterproofing. The key word is improvement. The tax people will not let you count things that are normal repairs and upkeep.

It pays to keep accurate records of all your improvements and renovations. That way you can avoid having to guesstimate when the time comes to pay the IRS.

One more tip: You also can add to the cost of your house any commissions or legal fees you pay when the time comes to sell.