Nearly any home remodeling project, whether it’s the kitchen or the bathroom or anything in between, is an expensive endeavor. Virtually every remodeling project cost is going to the in four to five digit range, and so any project should be looked at as a major investment on behalf of the homeowner. Rather than paying such a substantial fee out of pocket, many homeowners elect to take out a loan from the bank to cover the costs. Home improvement loans are a common source of financing that banks will provide to homeowners. These are great options for funding a home remodeling project because, depending on your circumstances, you can actually be eligible for tax deductions on the interest you pay on home improvement loans. What follows in this article is a guide on how to make your home improvement loan eligible for tax deductions. Please note that none of this should be interpreted as professional tax advice or legal advice, and that you should definitely consult with a CPA before following any of the tips discussed below.
With the new tax laws passed by the Trump administration in 2017, there are a few changes that have occurred regarding how you can use the money that you deduct from your taxes for interest payments on home improvement loans. Additionally, there are certain requirements that must be met in order for your home to be eligible for such deductions. The first step is to find out whether or not your home meets the eligibility requirements for tax deductions on interest payments for home improvement loans.