Now that tax season is in full swing, homeowners are looking for every possible tax break available. If you performed any home improvement projects during the past year, you might be eligible for some deductions. However, in order for your renovation to qualify, it has to meet specific criteria.

For example, if you installed a water filtration system, you might be able to write off your expenses. However, this issue is complex, so make sure you fully understand the subject before filing your paperwork. Is your water filtration system tax deductible? Read on to learn more.

What Are Capital Improvements?

Capital improvements are renovations that add substantial value to a home. When you sell your house, you can avoid paying capital gains by writing off qualified projects as “capital improvements.” You should get in the habit of keeping all your receipts to ensure all your records are accurate when it’s time to move.

Single taxpayers may exclude up to $250,000 in capital gains when they sell their homes. If you file jointly, this amount increases to $500,000. Even if you didn’t make your improvements in the last tax year, you could still reap the benefits as long as you have all your receipts.

Do Water Filtration Systems Qualify?

There are three ways that your home renovation can qualify as a capital improvement.

1. It adds significant value to the property.
2. It extends the longevity of the property.
3. It helps the home adapt to new circumstances.

So where does your water filtration system fall within these standards? Your filter system could significantly increase your home’s value or extend its life, and it could also help your home meet your or other residents’ needs. For example, if you have a medical condition such as eczema or psoriasis or you use a CPAP machine, you’ll need filtered water to improve your health. So your water filtration system is tax deductible as long as it meets these guidelines.

How To Write Off Your Filtration System

First, you need to determine what kind of tax write-off your filtration system qualifies for. If your new system added significant life or value to your property, you could claim the deduction as a permanent improvement. If your new system addresses certain health problems, you could claim further medical deductions.

Ultimately, the best way to get the most out of your taxes is by consulting with a knowledgeable professional. They’ll be able to sort through your receipts, file the correct forms, and get you the largest refund possible.

Don’t let taxes keep you from improving your home’s water and plumbing systems. Delmarva Water Solutions has well pump sediment filters and various other filtration products to keep your water clean and clear. Contact us today and let us know how we can help!