When making home improvements, there’s more to gain than just aesthetic enhancements. While deck lights and new AC systems can increase your enjoyment and comfort of a space, there are many electrical improvements that you can take advantage of to lessen your tax bill at the end of the year. As the deadline for filing taxes has just ended, you have the rest of the year to plan home upgrades, complete the renovations, and organize everything to make the most of your money. By reading this blog, you might realize that many expensive upgrades that seemed out of reach are much closer to reality than you once thought! Here is the information about tax benefits and savings you need to know.
Tax Benefits (A Disclaimer)
Before we begin, it is important to know that any specific tax exemptions we recommend might not apply to your situation, or the law might have changed between the writing of this piece and when you read it. If you ever have any questions regarding taxes and whether or not you apply for exemptions, reach out to a tax expert in your local area.
Tax Credits for Green Technology – One of the best ways homeowners can improve their home’s electrical system, save on energy, and help the environment is by taking advantage of programs like the Energy Efficient Home Improvement Credit. This credit equals 30% of the cost of new clean energy products installed in your primary residence. Some of the things that qualify include:
- Solar panels
- Solar water heaters
- Battery storage and fuel cells
- Expenses related to installation and preparation, such as labor and materials
In Florida, solar panels do not have any sales tax, and local municipalities may provide more tax benefits or credits. Furthermore, Florida residents may be able to earn money through net metering, a process where you sell back electricity to a company like Florida Power & Light when you produce more electricity than your household uses.
Increasing Home Value Basis Through Renovations – There are a number of ways to deduct profits earned from a house sale from your income tax, and one of them is through home renovations that increase your total amount invested in the property. By documenting the costs of qualified improvements, such as energy-efficient appliances, solar panels, or hurricane windows, homeowners can increase their home’s value, fetch a higher price down the line, and benefit from electrical improvements in the meantime.
Home Office Deductions – With the increasing remote work trend, many South Florida homeowners have transformed spare rooms into dedicated home offices, but this isn’t always an easy process. Loading a room with computers, printers, and other devices that make your job possible can overload the circuit and increase the risk of fires unless you take precautions, such as installing additional outlets. Wiring, lighting fixtures, outlets, and electrical equipment expenses can often be claimed as business expenses, reducing the taxable income of self-employed or freelance workers.
Commercial properties can take advantage of certain tax benefits, but these are generally much more complicated and come with a higher level of scrutiny. If you are considering renovating a commercial property’s electrical system, you need to contact local experts who know the law and have experience helping property owners lower their tax burden.
For all your residential or commercial electrical requirements, look no further than Promise Electric. Our team of expert electricians is well-versed in handling projects of all sizes, ensuring that you receive top-notch service tailored to your specific vision and budget.
