Home Repairs and Tax Deductions – TurboTax Tax Tip Video


[Music] Hi, I’m Richard from TurboTax with some information
about home repairs and how they relate to your federal income taxes. Generally the IRS doesn’t allow you to deduct
the cost of repairing your home, but there are a few exceptions. One exception is if you suffer a casualty. Casualties usually cover sudden, unexpected
events that damage your property, like a hurricane. These are events that you have no control
over and are in no way your fault. You can claim a separate deduction for each
casualty event. For example, if you are hit by a hurricane
and then by a landslide in the same year, you can deduct the repair costs for each event
separately. There are numerous reductions however, especially
if you have insurance to help cover the damage. Another way to deduct the cost of repairs
is if you rent the home to tenants. But you’ll need to report all rental income
from the property in order to deduct the related expenses. Finally, some home improvements may be deductible,
especially if you’ve improved your home’s energy efficiency. These include:
Solar panels that generate electricity for your home. Solar powered water heaters for use inside
the home. At least half of your home’s water heating
capacity needs to be solar. Wind turbines that generate up to 100 kilowatts
of power for your home. Geothermal heat pumps that meet federal Energy
Star guidelines Fuel cells that rely on a renewable resource
to generate power. They must generate a half kilowatt of power. These credits are good through 2016, but expire
the beginning of 2017, except for the solar credits which are good through 2019 and then
are reduced each year through the end of 2021. Claim the credits by filing Form 5695 with
your tax return. Remember with TurboTax, we’ll ask you simple
questions and fill out the right forms for you. For more information about this and other
tax topics, visit TurboTax.com. [Music]

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