I am in the process of upgrading my home with home improvement projects. Can I deduct the cost of a new roof?
Unfortunately you cannot deduct the cost of a new roof. Installing a new roof is considered a home improve and home improvement costs are not deductible.
However, home improvement costs can increase the basis of your property. For most homeowners the basis for your home is the price you paid for the home for or the cost to build your home.
Home improvements increase the basis of the property. This is called the adjusted basis. Some examples of improvements that may increase your basis include:
Replacing the entire roof
Rewiring the home
Putting an addition on the home
Installing central air conditioning
Paving the driveway
You will need to keep records of all home improvements made to increase the basis or determine the adjusted basis of your property. As you improve your home and increase the basis, the gain on your property will decrease when you sell it.
A property gain in the increase in the value of the property. The higher the gain, the more tax you will pay when you sell the property. The adjusted basis helps to offset the gain by increasing the base value of the home.
For more information about adjusted basis, please visit: https://www.irs.gov/publications/p530/ar02.html
Head of household is a filing status for single or unmarried taxpayers who have maintained a home for a qualifying person, such as a child or relative. This filing status provides a larger standard deduction and more generous tax rates for calculating federal income tax than the Single filing status.
When it comes to making everyday tax decisions, we find that there's a gap between what's true and what's rumored. Let's explore four common tax myths.
An ITIN is issued by the IRS to help people file taxes without a Social Security number. Learn how to get an ITIN number, who qualifies, and where to apply.
Due to the recent TCJA changes, we have re-released our trusted Tax Calculator. With a side-by-side comparison, you can now plan for this year's tax filing.