Let's talk taxes....

[bluesman2a]

I admit it, I'm nearing fiscal illiteracy, and I've never found anybody I felt was really working taxes to my benefit or had any really good advice that wasn't already painfully apparent (even to the likes of me). This year I thought I would start some research a little early. We've already sunk some pretty serious $'s into home rennovations/upgrades/repairs. Specifically, what can you typically write off on home improvement projects, rennovations, and upgrades? Like say a new garage?

A little background: We bought a new house this year kept a chunk of equity out to do improvements around the place. The main thing we did was The Great Wall Project, but we also have a small barn being built, and of course the larger shop. In addition to all that, we've done a couple of thousand in miscellaneous upgrades and repairs.

So any advice (either Federal or Georgia) on what I can write off this year or keep in mind for use to my advantage later?

 

[W-Cummins]

Is this your home and not a business or rental property? If so none for the feds as far as I know. Your state may have some thing but I wouldn't hold my breath there either... IF it is a business or rental property you will most likely need to depreciate it, not write it off. Most thing like that are considered capital improvements and may require a multi year deprecation (ie. a 20 year ) schedule

Note I'm not a tax lawyer or an accountant, nor do I play one on TV. SO.... you might want to PAY one for some advice, and please remember the above advice is worth what you paid for it.

 

[wrigh003]

2007 is the last year (for now, anyway) that the IRS is running tax rebates on energy efficiency related home improvements, if you have done any of those and have receipts (there's the kicker), then you could write some off. See IRS.gov for details.

I think it only amounts to about a 10% discount on some of the stuff, but hey, that's something.

 

[MotorCity57]

Generally you will not have any deductions for improvements to a residence, including a residential garage. However, you still need to keep records of your home improvement expenditures. If you ever sell your property you may have a taxable gain to report if your sales price exceeds your cost. The money you spent to build that wonderful garage is part of the "cost" of your property, and can reduce that taxable gain. Of course, it always helps to have adequate records to show the IRS.

 

[Kevin54]

I think it is getting to the point with the way unemployment is reaching all time highs and the government (both local and federal) that it is now to the point "write off nothing and pay taxes on everything". I just built a building for the wife to start plant / flowers in, and the tax adjuster came around this year and wanted to know if it was done. Well it wasn't as it had no siding etc..... And I was not home at the time, but the wife said "no". So he started drooling all over himself and said he would be back next year. So I will have to bite the bullet and probably pay out the wazoo.

Kevin

 

[CraigFL]

You can use interest paid for a home imrovement loan as a deduction on your Schedule A.

 

[trovato]

I think it is getting to the point with the way unemployment is reaching all time highs and the government (both local and federal) that it is now to the point "write off nothing and pay taxes on everything". I just built a building for the wife to start plant / flowers in, and the tax adjuster came around this year and wanted to know if it was done. Well it wasn't as it had no siding etc..... And I was not home at the time, but the wife said "no". So he started drooling all over himself and said he would be back next year. So I will have to bite the bullet and probably pay out the wazoo.

Kevin

Unemployment is reaching all time highs? What country do you live in? Here's some data:
http://www.csus.edu/indiv/j/jensena/sfp/us/US-UR-50.htm
Perhaps I am misunderstanding that sentence.

In NY, one would need a building permit. Once the job is complete, you get a Certificate of Occupancy (C of O). The tax assessor knows this and assesses based on percent completion. In other words, a yes or no answer to "are you done" would have no effect here. Lately, they've been doing regular reassessments regardless of any changes to the property.

 

[daddylama]

Unemployment is reaching all time highs? What country do you live in? Here's some data:
http://www.csus.edu/indiv/j/jensena/sfp/us/US-UR-50.htm
Perhaps I am misunderstanding that sentence.

In NY, one would need a building permit. Once the job is complete, you get a Certificate of Occupancy (C of O). The tax assessor knows this and assesses based on percent completion. In other words, a yes or no answer to "are you done" would have no effect here. Lately, they've been doing regular reassessments regardless of any changes to the property.

in Oregon, after a getting building permit the assessor comes knockin' at the door about 4 months later to see it... assesses based on percent of completion. we're apparently getting the regular reassessments, as well...
plus they show up after every home purchase. if you're not home, they just measure the outside of the house and building(s), taxes based on square footage of living space + # of bathrooms + square footage of "additional space" whatever the hell that means.

i was lucky enough that the assessor actually DEDUCTED stuff, because they thought the basement was finished in living space.

now, that 2007 is the end of the tax credits... i didn't know that. damn. need a new heat pump, water heater, stove and more... but can't afford to get 'em all before the end of the year.


original poster: sorry, just realized i've got nothing relevant to your question... just in the same boat as you, i guess...

 

[boiler7904]

now, that 2007 is the end of the tax credits... i didn't know that. damn. need a new heat pump, water heater, stove and more... but can't afford to get 'em all before the end of the year.

It may not pay to do all of it at once as there is a cap to the credit that a homeowner can receive in one year. Here's a link to the energy star info:

Energy Star Tax Credit Info

I'd pick ones that you can afford that will give the most bang for the buck.

 

[wrigh003]

It may not pay to do all of it at once as there is a cap to the credit that a homeowner can receive in one year. Here's a link to the energy star info:

Energy Star Tax Credit Info

I'd pick ones that you can afford that will give the most bang for the buck.

Yeah- I got all excited, too, when I heard about it, turns out that for most of it, you get the same deal as if you had a 10% off coupon at Lowes or HD. However, since it's a back end thing, you could use the coupon AND take the tax credit, I think... If you're interested in solar power or solar water heating, there are some neat credits for that that are a little bigger.

I need a couple of replacement windows and some insulation for the basement finishing/remodel I have going on, and I'll wind up buying those things sometime before Christmas, even if I have to just let them sit until I get time to put it all in.

 

[Coach James]

The unemployment rate is actually quite good right now.

Coach

 

[trust]

damn, I'm actually glad to live in New Mexico, the only time we get reassessed is when we get a new appraisal for a mortgage, and then it's a maybe, if the assessor knows about and gets a copy of the appraisal and decides to act. Then if he's a cousin........

Guess I do need to look into the solar credit stuff though, may want to get moving more quickly on our wind turbine and PV set up. So thanks for the heads up guys

 

[sunshineFC3s]

http://www.dsireusa.org/index.cfm?&CurrentPageID=7&EE=1&RE=1

For your personal home, there are no write-offs. If you itemize (and you should as a home owner), you can take the mortgage interest deduction.

As far as selling and the gain...if you live there for at least 2 years, then you do not recognize $500k of gain (if married filing joint) if you put that gain into buying another primary residence after the sale.

Look into the "green" credits/incentives...there are some good ones there available for residential customers. There are also a bunch from local utilities.

Also, if anyone is paying PMI on their mortgage now...I think in '07 PMI got lumped in with mortgage interest as far as deductability. So you can now take that deduction as well.
-a