If you or someone in your family is suffering from a long-term medical condition or disability, you may find that you need to make some changes around the house. Don’t miss out on valuable tax deductions for these medically necessary home improvements. Read on to find out more!
What Can You Deduct?
If you alter your home to accommodate a household member’s medical condition, then you may be able to take this deduction. The biggest sticking point (in the eyes of the IRS) is the reason for the change. If the primary purpose is aesthetic, it’s not eligible—you can’t claim any money back from the IRS. If the primary purpose is to make your home more functional or accessible for a household member with a medical condition, you should be good to claim the deduction.
Examples of Common Improvements
There are many medical conditions that don’t necessitate home improvements. Conditions that do call for changes around the house very often have to do with mobility, safety, and accessibility. Some typical projects that can be deducted include:
- Installing ramps
- Widening doorways, hallways, and/or stairways
- Moving outlets and/or light switches for better access
- Grading driveways or walkways
- Installing railings or other types of support bars inside or outside the home
Again, as long as the primary purpose is to assist someone in the household who has a documented medical condition, most home improvements will qualify.
The other big rule around this particular deduction has to do with the value of your home. If a change you make increases the value of your property, you must subtract the amount of the increase from the deduction you wish to take. Otherwise, in the view of the IRS, you are getting two financial rewards for the same thing.
With that caveat in mind, make sure that you determine the value of your home prior to any major adjustments, and then get it appraised again afterwards. That way, you’ll be sure not to double-dip!
For guidance with the rules around taking a tax deduction for medical home improvements, call the team at Taxation Solutions, Inc. today. We are here to help taxpayers in Indianapolis understand IRS rules and maximize tax deductions. We look forward to helping you with all of your tax preparation and planning needs!