Gameroom / tax question

Shavenyak

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So I recently bought my FIRST house a couple of months ago. I've learned quite a bit but there's still plenty to learn. One of those things to learn is how buying a home effects your taxes.

I'm in the process of building a 1000 square foot gameroom in my backyard and I'm wondering if there's doing this effects my taxes. For example, would any of it count as a home improvement and be deductible? This will be our first year of itemizing so I'm pretty green with this. Any advice would be cool.
 
i'd ask a cpa. But i do know that the interest on your home loan is tax deductible.
Are you in Mempho? or down in Miss?
I'm in Cordova - aka Dirty 'dova lol.

nevermind - i see your in OB. Mississippi has some weird tax laws. Especially if you live in TN and work in Ms. ask me how i know.
 
I know in Washington seperate structures can be built without causing increases in your property taxes as long as they are under a certain size or built in a certain manner. I know my parents had a hassle a while back when they built an outbuilding to hold firewood. Two sides are completly open so technically it didn't qualify to be taxed. The assessor that drove by could only see the two sides that had louvered panels on them to hide the contents from the road. (but let air in to dry the wood)

Long story short, they didn't have to pay extra taxes..... but I know it is possible
 
I know in Washington seperate structures can be built without causing increases in your property taxes as long as they are under a certain size or built in a certain manner. I know my parents had a hassle a while back when they built an outbuilding to hold firewood. Two sides are completly open so technically it didn't qualify to be taxed. The assessor that drove by could only see the two sides that had louvered panels on them to hide the contents from the road. (but let air in to dry the wood)

Long story short, they didn't have to pay extra taxes..... but I know it is possible

I thought I heard of deductions for home improvements or something. Am I imagining this? Like I said, I'm new to this.
 
i'd ask a cpa. But i do know that the interest on your home loan is tax deductible.
Are you in Mempho? or down in Miss?
I'm in Cordova - aka Dirty 'dova lol.

nevermind - i see your in OB. Mississippi has some weird tax laws. Especially if you live in TN and work in Ms. ask me how i know.

Well, since we just moved I'm doing the opposite now--living in MS and working in TN (Memphis).

We'll have to get together sometime CD. Do you like beer?
 
I thought I heard of deductions for home improvements or something. Am I imagining this? Like I said, I'm new to this.

Good luck with that. The tax benefits for home improvements are generally limited to things like insulation, energy star products, windows, etc. that reduce power consumption and things like that. No benefit to adding square footage or making other regular improvements.

Wade
 
So I recently bought my FIRST house a couple of months ago. I've learned quite a bit but there's still plenty to learn. One of those things to learn is how buying a home effects your taxes.

I'm in the process of building a 1000 square foot gameroom in my backyard and I'm wondering if there's doing this effects my taxes. For example, would any of it count as a home improvement and be deductible? This will be our first year of itemizing so I'm pretty green with this. Any advice would be cool.

I've only heard of this in regards to energy-saving upgrades like insulation or more energy efficient appliances. And I'm an architect, so I'm quizzed about this stuff pretty frequently by clients.

There is currently a tax credit for first time homebuyers in effect, but that's irrelevant as to whether you improve the home -- it's based on the purchase solely.
 
I'm pretty sure the others are right so far that improvements only get you a tax break for current government programs on energy efficiency, etc... You do need to keep records for all other types of improvements. Improvements are money you put into the house that are not maintenance related. So painting an existing room doesn't count, but painting the new addition does. You will need all of the records from the improvements for when you sell your house. It basically comes down to what you paid for your house, what improvements you put into it, and other qualifying expenses as being your cost basis for the house when you sell it. Anything you make over that cost basis is subject to taxation. So that is sort of like a tax break in that you shouldn't be paying taxes if your total sales price doesn't exceed what you put into it over the years.

I use Turbotax and it will explain all of this stuff when you sell your house, but at that point it is too late if you didn't keep your records. A Tax guy is certainly recommended if you don't want to get into the details yourself.

-VJ
 
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