You can’t write off the new sofa that spruced up your living room, but some home improvements, so-called capital improvements, do have tax benefits. According to the IRS, an improvement must add to the value of your home, prolong its useful life or adapt it to new uses.
Certain capital improvements considered to be medical expenses can qualify for deductions. Think of necessary upgrades like installing an entrance ramp or widening a doorway so a wheelchair can pass through.
Other upgrades that make your home more accessible may qualify as well — projects like adding railings to a bathroom or installing modified smoke detectors for someone with hearing issues. Homeowners may also be eligible to deduct upgrades to their home office if it is their main place of business.
Generally, capital improvement expenses are depreciated over time, meaning the full cost of the change is divided by its useful life, and that’s the amount you can deduct in a given year, according to Investopedia.
Remember: Capital improvements and home repairs are not the same thing in the eyes of the IRS. Repairs are changes like painting a room or fixing a leak, while improvements add to the home’s value or prolong its life.