Home improvement projects may offer tax benefits

As homeowners embark on renovations, understanding potential tax deductions can ease financial burdens. Not all improvements are deductible, but specific projects can yield tax benefits, according to OneMain Financial.

Capital improvements, which enhance property value or extend its life, may qualify for deductions if they last over a year and are retained upon sale. Examples include adding bedrooms, upgrading HVAC systems, or landscaping.

Additionally, home modifications for medical purposes, such as installing ramps or widening doorways, might be tax-deductible. Homeowners utilizing home equity lines of credit (HELOCs) for improvements may also deduct interest if claimed in the year the project occurs.

Self-employed individuals can deduct home office renovations, while repairs on rental properties may qualify as business expenses. For clarity on eligible deductions, consulting a tax professional is advisable to avoid penalties.