With tax season now here, it would be worth discussing a related topic that is within the scope of home improvement, particularly residential roof replacement and repairs. In today’s post, Rapid Roofing explains “capital improvements” and what counts as such.
About Capital Improvement
This term refers to an update of one or more areas of a property aimed at extending its usefulness and adding to its value rather than fix a short-term problem. A capital improvement can be extensive than repairs and may involve greater costs.
When a certain project is considered a capital improvement, it means it must be counted for tax purposes, especially when you take out a home improvement loan. The interest you pay for the project can be subject for tax deductions as long as the loan satisfies two conditions. The first is that the loan must be secured by your primary residence. The second is that the proceeds of the loan must be used to “substantially improve” your home.
Do Exterior Home Repairs Count?
When you decide to use the loan to replace your roofing system with the help of your local residential roofing services provider, then it is counted as a capital improvement and is subject to tax deductions. Simple roof repairs and routine maintenance, however, are not considered improvements, which means they won’t be deducted from the interest of your loan.
One thing you need to know, however, is that there are exceptions. Called safe harbor rules, these help your repairs and maintenance expenses to be deducted. One of them involves expenses that cost $2,500 or less per item or per invoice.
Scoring tax savings out of home improvement is possible, but it takes the help of knowledgeable tax advisors to make this happen. Meanwhile, when you are in need of exterior improvement services, turn to Rapid Roofing. We offer residential and commercial services, including roof replacement and skylight installation.
Call (734) 234-5900 to get started. You may also fill out our contact form to request a free estimate. We serve Ann Arbor, MI, and surrounding areas.