In the summer, many of us take on home improvement projects, ranging from minor repairs to major remodeling. Though all home improvements cost money, many don’t improve the value of the home. Here are some ways to remodel your home while you recoup the maximum that you can, including some energy tax credits.
1. Add space. Converting a storage attic into a bedroom, building an entertainment deck, or finishing a musty basement is a smart way to add usable square footage to a home, which will increase its livability as well as its resale value. You can even add a second story, enlarge the garage or create an extra bathroom for a busy household. With many families sharing space with other family members or roommates, having more bedrooms and living space is a definite plus.
2. Increase curb appeal. Install a new front door with pizazz, redo an entry, landscape the front yard, paint the house or replace worn siding. All these projects spruce up your home and give the exterior a fresh appeal.
3. Remodel kitchen and baths. Up-to-date kitchens are always in demand, so replacing counter tops and appliances can add a great deal to the saleability of your home. Likewise, bathrooms can sparkle with new fixtures, flooring, paint and mirrors, at relatively little cost.
4. Save energy. Replacing windows and doors that leak and adding insulation will save heating and cooling costs. These improvements may also save tax dollars. For 2011, you can garner an income tax credit of up to $200 for Energy Star-qualified windows and skylights and up to $500 for Energy Star-qualified doors. Replace your water heater with a new efficient one, and you can receive up to $300 in credits. Furnace improvements and central air conditioning may yield tax credits of as much as $300. In most cases, the tax credit is 10% of the amount you spend, and the overall credit is limited to $500. To claim the energy tax credit, file Form 5695 with your 2011 tax return.
5. Go solar. Because they are so efficient, the government is offering a 30% tax credit for solar energy systems and geothermal heat pumps, as well as small wind turbines with no limit on the credit you can claim. This credit is available through 2016.