Reducing your tax burden can help you increase your savings or disposable income. In general, home improvements aren’t tax deductible, but your water filtration system might be. Read on to learn if your water filtration system is tax deductible.
Capital Improvements
A capital improvement adds value to a home; it’s different from a home repair, which is just general maintenance. Capital improvements can lower the taxes you pay on the proceeds you receive from a home sale.
According to the IRS, water filtration systems are a type of improvement that can increase basis. Basis is what your property is worth for tax purposes. If the water filtration system increases your basis, you can subtract the basis from your sale revenue to lower your gain. You pay taxes on the gain, so subtracting the capital improvement will reduce your tax burden.
Medical Expenses
Many people know that costs for prescribed medications and medical devices are tax deductible. If you install a water filtration system to provide medical care for yourself, a dependent, or your spouse, it can qualify as a tax-deductible medical expense.
A household water filtration system can alleviate skin irritation, such as eczema or psoriasis, caused by untreated water. If you require filtered water for your medical devices, such as distilled water for a CPAP machine, a filtration system helps you get the treatment you need.
Other Savings
Consult a tax professional to learn how your water filtration system might qualify for a tax deduction. How your system alleviates your tax burden depends on your circumstances.
A water filtration system can help you save money in ways other than lowering your taxes. With delicious home drinking water, you won’t rely on expensive bottled water for hydration. And water softeners make your bathing products, detergents, soaps, and household cleaning products more effective, meaning you’ll save money on these essential items because you will use less over time.
Contact Good Water Company when you’re ready to explore home drinking water solutions. Our drinking water system services support your health and make life more convenient. Schedule a water test with us today so we can determine the appropriate treatment for your home.