If you or a member of your household need modifications to your home for medical reasons, the cost of making and maintaining those changes might be tax deductible. Read on to find out more!
What Is a Medically Necessary Home Improvement?
If you make a home improvement to meet a medical need, that qualifies as a deductible expense because it is “medically necessary” in the eyes of the IRS. Modifications to your home made for primarily aesthetic reasons are not deductible, however. This isn’t to say that health-related home improvements can’t look nice—it just means the main purpose has to be health-related, not appearance-related.
Medically necessary modifications include anything that makes it easier and/or safer for you or a household member to navigate your property. Some examples include:
- Grading the ground outside your home
- Widening doorways and/or hallways
- Installing ramps
- Adding stair lifts or elevators
- Lowering access to storage areas, kitchen equipment, and more
- Relocating or adding outlets for easier access
- And much more!
The long and the short is, if you make a change to your home in response to a household members’s medical condition, you can deduct the cost of making that change and maintaining it.
Don’t Double Dip!
The big caveat to this type of deduction is that you can’t “double dip” if the modification you make increases the value of your home. In other words, if you make a medically necessary home improvement and it happens to increase the value of your home, you can’t take the tax deduction and benefit from the increase in value.
In this situation, you have to subtract the cost of the home improvement from the increase in value. If you end up with a positive or zero balance, you cannot deduct anything. If you have a negative balance, that means the cost of the home improvement was greater than the increase in value. This difference is what you can deduct on your taxes.
For help navigating the world of health-related deductions, call the experts at Taxation Solutions, Inc.! We’re your number one resource in Mesa for tax questions, preparation, and filing. Contact us today to find out how we can assist you!