income. You can add the improvement cost to the value of your property to reduce the amount of this taxable income. This can help you save money in taxes following the sale. • Home office deduction. If you are self-employed and work from home, the amount of space in your home that’s dedicated towards business activities is tax deductible. This deduction will include loan interest, insurance payments, utilities, repairs, and more. However, with the TCJA going into effect for 2018 - 2025, people not filing as self-employed are ineligible for the deduction. There are other specific guidelines for taking advantage of this deduction, so check with your professional tax preparer before filing. • Home energy tax credits. The IRS rewards homeowners who make efforts to create eco-friendly homes. Solar is particularly lucrative, as the installation of a solar power system or solar hot water system earns you a 30% federal tax credit until the end of 2019. After 2019, the credit falls by a few percentage points each year until 2022, when the credit is scheduled to expire. Unfortunately, many other federal energy efficiency credits expired in 2016, but that doesn’t mean you should give up on being eco-friendly. Many state and local tax credits, incentives, and rebates are offered for upgrading your home’s energy efficiency. I threw a lot of numbers and information at you. Please check with your CPA, financial advisor, state and local governments for the latest guidelines and help.
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