There are always projects that need to be done around the house when you are a homeowner. A great advantage to some of them is that they are tax deductible. Before you go and add a pool or update your master bathroom, take a look at these upgrades that are deemed tax deductible. 
Energy-efficient upgrades
If you make energy-efficient upgrades to your home, you might qualify for the Energy Efficient Home Improvement Credit. Renamed in 2023 from Nonbusiness Energy Property Credit, you can qualify for up to $1,200 per year or 30% of the total amount spent (whichever is less). Unfortunately home energy audits, exterior doors, exterior windows and skylights, insulation and air sealing materials, central A/C units, natural gas, propane heaters, oil water heaters, furnaces or hot water boilers.
Medically necessary home improvements
Medical conditions that require a homeowner to install special features and equipment might be deducted under medical expenses. Also if the improvements do add value to your home, they cannot be deducted. The IRS will allow you to deduct for building entrance and exit ramps, expanding doorways at entrances or exits, widening or customizing hallways and interior doorways, installing railings and support bars to bathrooms, lowering or adjusting kitchen cabinets and equipment, relocating or modifying electrical outlets and fixtures, setting up porch lifts and other forms of lifts, adjusting fire alarms and all other warning systems, making modification to stairs, adding grab bars around the house, changing the hardware on doors, reworking spaces at the front entrance and exit doors, and leveling the ground for easier accessibility.
Save money when you sell your home
The majority of your projects will not be tax deductible, but when you go to sell your home, you can reduce the taxes on the sale of your home. Right now, the capital gains exclusion lets home sellers walk away with $250,000 of profits tax-free. Homeowners just need to have lived in the home for two of the last five years.
If you are in the market to sell your home, find a local real estate agent who can help you determine what is tax-deductible. An agent will also be able to help you from the start to finish of the home selling process.
