Home Improvements Can Lower Your Taxes
Three Tips to Use Your Home to Lower Your Taxes
69% of new entrepreneurs, according to an article from the U.S. Chamber of Commerce, will begin their businesses out of their homes. If you plan things right and designate a space in your home to be exclusively for business, and that space is the principal place you conduct business, you could take the home office deduction. For example, if you use, say 15% of your home as an office, then you can take 15% of such expenses as mortgage interest, homeowners insurance, or home repairs.
With a little bit of forethought and planning, you can improve your house and lower your taxes. Many small businesses expenses are deductible and can lower your taxes such as the cost of goods sold, business start-up costs, insurance, car expenses, business interest expense, just to name a few. With a matter of organization, investment, and a bit of elbow grease, you can perform general maintenance on your house and possibly set yourself up to pay lower taxes.
Receive a home inspection
Unless you're a contractor or have another area of expertise in residential homes, you may want to consider employing an inspector to come to check your home. Despite their close association with the real estate industry, home inspectors also check homes for issues for insurance companies and seasonal contractors. This is the person to hire if you want a full diagnosis on your home's state. You can even ask him or her what areas need addressing first, and then what area next, before winter or summer or whatever season is approaching.
It's important to remember that a home inspector is different from a property assessor. The latter performs a function in determining you're home's assessed value, which contributes to how much you pay in property taxes every year.
An inspector will be able to tell you what spots of your home may pose a potential problem during the seasonal change. Perhaps your roof has loose shingles or a leak. Maybe your basement has some dampness issues. Having these issues addressed by a professional can end up saving you a lot of money.
Patch up any holes or gaps
Energy.gov notes cold air has an almost magical way of finding its way into homes when the approaching winter season begins. Even if you caulked up every visible gap, weather-stripped until you were blue in the face, and insulated every square-inch of attic space last year, it's wise to check on last season's handywork. Time has a way of undoing our most diligent of home-maintenance efforts.
So, even if you did it all last year, conduct a thorough check again to see if an extra roll or two of insulation is needed in the attic or garage. Check around every window for air leaks and seal them however you can. Consider adding fresh weather-stripping in place of what you applied last year. The goal is to search every nook and cranny of your home to find areas where air could get in.
Prepare to repair
Whether you are planning for winter or preparing for summer, prepping your house can save you a lot of time and money later down the road. And if you prepare properly, you may be able to take off a percentage of your repairs as business expenses, lowering your tax bill. However, don't wait too long to address a problem in your home.
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