How to Save Money with new Siding InstallationPosted:Jun 19th, 2016 2:27 pm
It is common knowledge to most homeowners that their homes entitles them to certain forms of federal tax breaks, principal among them, mortgage interest based deductions and property taxes that they pay on an annual basis. However, first-time home buyers and sellers, and even many seasoned homeowners, do not know about other tax credits and deductions for home improvements. Depending on the type and purpose of home improvements, you can enjoy substantial tax credits and deductions.
What is home siding?
Wall cladding or home siding refers to the exterior material applied to the walls of a building for purposes of insulating, protecting walls from weathering, shedding water, or for aesthetic purposes. Most common forms of siding include fiber cement, vinyl, and steel. Minnesota being part of the Midwest is prone to high degrees of varying temperatures, wind, hail, snow, and rain. Because of this, eventually most home owners will realize at some point that they need at least some new siding.
Are there any tax credits or other money savings with new siding?
Installing a new siding is a major expenditure for home improvement and thus it is only natural to ask whether there are any tax credits or deductions for new siding. Generally, the answer to this question is no. this is because the Internal Revenue Service (IRS) considers these expenses as being general maintenance or home improvements that are intended to increase the value of the house or improve the life's of the occupants. However, as is the case with many tax issues, there are ways through which homeowners can recoup part of the cost or all of the cost of installing new siding.
If this is the case then how can I enjoy these tax credits or deductions?
In order to enjoy these deductions and credits it is important to involve the services of a qualified tax adviser in order to properly determine your potential tax liability and a qualified home improvement expert to advise on the kind of siding that qualifies for tax credits. In addition, the mode through which you finance the new siding will play a role in determining whether you get to enjoy these benefits or not. However, it is important to note that these benefits do not qualify for new homes. Below is a list of ways trough which you can enjoy these tax benefits.
1. Financing new siding with a loan
Financing new siding with a line of credit or a home equity loan, you can qualify you for deductions on the interest payable on the loan. This is the same way as it happens with interest on primary mortgages. However, you need to know that the material used qualifies you for the deduction on interest. That is why you need a qualified home improvement expert like us. You also need to know that deductions are made on the interest not on the principal loan itself.
2. Installing energy saving/insulating siding
New siding that is meant to insulate or improve the energy consumption of your house qualifies you for tax credits of up to $500. However, you need to realize that there are certain materials that do not qualify for the tax credits. Additionally, the installation must be complete by December 2016 and that the materials used be Energy Star rated and qualified for the area. For Minnesota, for instance some of these siding materials include but not limited to Linebacker Siding Insulation, Fullback V Siding Insulation for Vinyl Siding, and Fullback FC Siding Insulation for Fiber Cement. For more details, please feel free to contact us. However, you need to realize that installation costs do not qualify for the tax credits.
3. Installing new Siding for medical reasons
You can also enjoy tax benefits if you can be able to demonstrate that the siding was not installed to improve the value of the house or for aesthetic purposes but instead for medical reasons. This mode is rather difficult to proof but as long as you have a doctor's statement that indicates that the changes made were for medical reasons such as to increase aeration, reduce allergic conditions, or other reason, then you can enjoy certain tax credits or deductions depending on whether the value of your house increased or not.
Hope that the information is helpful. For further details on installation of new siding or to get a quote, please contact us.
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