Home Improvements Made for Medical Reasons May Qualify for a Tax Deduction!
By Taxation Solutions, Inc. on 2017-11-25
Medical expenses can add up quickly, whether they are related to injury, illness, or simply aging. For many conditions, the medical expenses don't end at the doctor's office or the pharmacy. They crop up in the home, as well, by way of equipment installation, renovations, and home improvements to accommodate medical conditions.
The silver lining to these home-related health costs is that they may qualify as deductible medical expenses. If the primary purpose of a home improvement is to provide ongoing medical care for you, your spouse, or a dependent family member, you may be able to deduct it on your taxes.
What Exactly Can I Deduct?
As stated above, the primary purpose of any home improvement must be medical if you wish to deduct the expense on your taxes. Aesthetic or architectural alterations to your home do not qualify. That's not to say your medically necessary renovation can't look nice, but the appearance must be of secondary importance!
Some common home improvements done for medical purposes include:
- Constructing ramps to facilitate access to the home
- Grading the ground outside the home to provide easier access
- Widening doorways, both exterior and interior, to allow space for wheelchairs or other medical equipment
- Widening hallways and modifying staircases
- Adjusting the height of kitchen cabinets
- Installing handrails and grab-bars in bathrooms and other locations throughout the home for safety
- Installing lifts to facilitate access to various levels of the home
These initial renovations and installations, as well as ongoing service necessary to maintain the medical benefit of the home improvement, qualify as medical expenses.
Account for Any Increase in Value
The tricky thing with home improvements is that they can sometimes increase the value of your property. While not every alteration automatically boosts the value of your home, it is your responsibility as a homeowner and taxpayer to keep track of the value of your asset, especially if you're claiming deductions for medically necessary home improvements.
The best way to do this is to find out the value of your home pre- and post improvement. If there is an increase in value, compare that number to the cost of the changes you made. If the amount of the increase is greater than or equal to the cost of making the improvement, then you can't take a deduction.
However, if the increase in value is less than than the cost of the renovation, you can take a deduction. You have to subtract the increase in value from the expense of the renovation; the remainder is what you can claim as a medical expense on your taxes.
If you have questions about claiming medically necessary home improvements on your taxes, reach out to the pros at Taxation Solutions, Inc. today! We are your source for tax information in San Antonio and beyond.