Planning Tax Smart Home Improvements this summer

Making strategic home improvements can enhance your living space, increase your home's value, and even provide tax benefits. At Sandia Area, we want to help you make informed decisions that align with your financial goals. Here are some smart ways to improve your home while potentially maximizing tax advantages:
1. Energy-Efficient Upgrades

• Solar Panels – Installing solar panels can reduce your electricity costs and may qualify you for federal tax credits.
• Energy-Efficient Windows – Upgrading to Energy Star-rated windows can improve insulation and may be eligible for tax credits.
• Insulation Improvements – Adding insulation to your attic, walls, or basement helps with energy efficiency and could qualify for tax incentives.

2. Home Office Improvements

• Dedicated Office Space – If you work from home, renovating a home office may allow you to take a tax deduction under the home office expense category.
• Furniture and Equipment – Upgrading your office setup with desks, chairs, and equipment can often be deducted if used for business purposes.

3. Accessibility Modifications

• Home Accessibility Upgrades – Installing ramps, grab bars, or widening doorways for medical necessity may qualify for deductions under medical expenses.

4. Landscaping Investments

• Water-Efficient Landscaping – Xeriscaping or installing rainwater collection systems may qualify for state or local tax incentives.
• Curb Appeal Enhancements – While general landscaping costs are not deductible, they can increase your home's resale value, benefiting you in the long run.

5. Value-Boosting Renovations

• Kitchen and Bathroom Remodels – While these expenses aren’t immediately deductible, they contribute to home equity and can impact future tax calculations.
• Roof Replacement – A new roof improves your home’s energy efficiency and could qualify for certain energy credits.

6. Tax Credits and Deductions

• Research Available Credits – Look into federal, state, and local tax credits for home improvements. Sandia Area members can also explore our Home Equity Loan options to help fund renovations.
• Keep Track of Expenses – Document all receipts and invoices to ensure you can claim any eligible deductions.

7. Timing Your Improvements

• Align Projects with Tax Years – Consider completing improvements in the same tax year to maximize deductions or credits.

8. Get Expert Guidance

• Consult a Tax Professional – Before starting major projects, speak with a tax advisor to understand the full financial impact.
• Explore Sandia Area's Home Financing Options – Whether you need a Home Equity Loan, a Home Equity Line of Credit (HELOC) or a Cash-Out Refinance to fund your improvements, we’re here to help.

At Sandia Area, we’re committed to helping you make smart financial decisions. Reach out to us to explore financing options that make your home improvement plans a reality!