Can you write off home improvement to your home office?

If you work from home, chances are you're always on the lookout for what you can deduct from your taxes. If you can claim that your home is your principle place of business, certain home improvements can be deducted; but you have to know just what you can write off before considering any major changes and repairs. Some home improvements, not including repairs and general maintenance, qualify as deductions if they add value to your home, such as adding a room or swimming pool. They can only be deducted from your capital gains when you sell the house. Your capital gain is the difference between the purchase and sale price, which is taxable.

There are certain home improvements that do give you tax credit. Going green not only saves energy, but you may be able to get a 30 percent reduction in taxes for installing energy-saving systems in your home. Specific energy-efficient products and additions can be written off on your itemized federal income tax form so you pay less tax. These include windows, doors, insulation and energy-efficient heating and cooling systems. Solar energy systems such as solar panels and water heaters, small wind-energy systems, biomass stoves and geothermal heat pumps also qualify. Make sure to save all your receipts and keep detailed records in case of an audit.

Another category of home improvement that can be written off is medical necessity. If your home improvements are for medical reasons, such as to enable wheelchair access, they are classified as deductible. But before you start any work on your home, check with your tax consultant and IRS guidelines for updated information on tax breaks and deadlines.