White Sands Tax Services Featured in New American Funding: Home Improvement Tax Breaks Homeowners Miss
White Sands Tax Services Featured in New American Funding: Home Improvement Tax Breaks Homeowners Miss
Tax season has a funny way of turning home projects into homework. You replace a roof, build a ramp, upgrade insulation, or finally set up a real home office, and then you wonder, “Does any of this help at tax time?”
We were recently quoted in a New American Funding Learning Center article on this exact topic, including insights from Ruth White of White Sands Tax Services on what homeowners should document and how certain improvements may affect deductions, credits, and future taxes when you sell. You can read the full piece, “The Most Valuable Home Improvement Tax Deductions for Homeowners,” on New American Funding’s site here.
Below is a summary of the key takeaways, along with practical recordkeeping advice we recommend for all homeowners.
Start here: Deductions and credits are not the same
The article highlights a core point that changes the entire conversation: deductions reduce your taxable income, while credits reduce your actual tax bill.
This distinction is important because similar-sounding upgrades can have very different effects on your tax return.
Home office upgrades: helpful, but only for certain taxpayers
If you are self-employed and have a qualifying home office, the article notes that some home office upgrades may be deductible, often through depreciation.
If you are a W-2 employee working remotely or hybrid for an employer, the article notes you generally are not eligible for the home office deduction.
White Sands tip: before you spend hours tracking receipts, confirm whether you are filing as self-employed and whether your home office meets the basic use requirements. If it does, your deduction is usually driven by the workspace percentage and the method you use to calculate it.
Medical accommodations: a potential deduction with a common catch
The article points out that certain accessibility-related improvements (think widened doorways, grab bars, ramps) may be deductible as medical accommodations.
Here is the catch Ruth mentioned in the piece: the deductible portion is often reduced if the improvement increases the home’s value.
White Sands tip: These cases commonly require extensive documentation. Retain invoices, proof of payment, and a brief note explaining the medical purpose of the project.
Capital improvements: the tax benefit might show up when you sell
Not every “improvement” creates an immediate tax break. Sometimes the win comes later.
The article explains that capital improvements can increase your cost basis, which may reduce capital gains tax when you sell, especially if your gain exceeds the standard exclusion thresholds.
White Sands tip: Homeowners often lose tax benefits due to missing documentation. If you plan to sell in the future, maintain thorough records of all improvements, as saved receipts can be valuable later.
Home equity loan interest: it can be deductible, but tracking matters
The article notes you may be able to deduct interest on certain loans used for qualifying home improvements, including some HELOCs, cash-out refinances, and second mortgages.
It also includes an important warning we agree with: you need to document that the proceeds were used only for qualifying improvements, and itemizing only helps if your itemized deductions exceed your standard deduction.
White Sands tip: if you used borrowed funds, keep a clean paper trail. That means invoices and proof of payment, plus bank statements showing the flow of funds when possible.
Energy-conserving enhancements: these are often credits, not deductions
The article notes that certain energy-conserving upgrades may qualify for tax credits and encourages homeowners to talk with a tax professional about claiming them properly.
White Sands tip: Credits can be valuable, but eligibility requirements are specific. Save specification sheets, invoices, and any certification documents from the contractor or manufacturer.
The recordkeeping rule that saves the most money
This is the part we care about most, because it is the difference between “maybe” and “claimed.”
In the article, Ruth recommends saving every invoice and proof of payment and writing a brief note about what the project was and why it was done.
She also notes that standalone repairs can sometimes be “bundled” into a larger improvement project when they support the overall value-added work.
Here’s a simple system that works:
Create a folder (digital or paper) labeled by year, then by project name
Save: contract, invoice, proof of payment, and a one-sentence purpose note
If financing was involved, keep the loan documents and a basic “use of funds” summary
Take before-and-after photos for major projects, especially accessibility and structural upgrades
Bottom line
Home improvements can provide significant tax benefits, but these depend on the project category and the quality of your documentation. Organize your records now, rather than waiting until tax season.
If you want aid sorting upgrades into the right bucket and building a clean recordkeeping plan, we’re glad to walk through it with you. You can book a free 15-minute consultation on our site at White Sands Tax Services or explore our tax tips library here.
