Your home is a great source of tax savings if you know what qualifies and don’t forget to claim deductions and credits. If you missed any of these five, you can go back in time — roughly two to three years — and amend your tax return.
1. Home Office Deduction
If your home is your principal place of business, you can take a standard deduction or deduct a percentage of eligible home expenses like:
- Utilities
- Mortgage interest for the proportion of the house used as your office
- Home repairs and maintenance
Forms you’ll need to amend your tax return:
- 1040X
- Form 8829 and Schedule A (if you’re employed by someone else) for the year you’re amending
- Schedule C (if you’re self-employed) for the year you’re amending
2. Residential Energy Tax Credit
If you installed energy-efficiency improvements (like HVAC systems, insulation, a roof, windows) in in past years and didn’t take a tax credit for those upgrades, you may have missed out on up to $500.
My husband and I didn’t claim the energy tax credit for insulation we installed one year because we thought we’d get a better deal if we claimed the credit the next year when we planned to replace windows. But we never got around to replacing the windows. So we amended our return to claim the tax credit for the insulation and got a $500 tax credit.
Forms you need to file an amended return:
- 1040X
- Form 5695 for the year you’re amending
3. Home Improvement Sales Tax Deduction
If your state and local town doesn’t tax income, you can amend Schedule A to deduct state and local sales tax you paid. Say you added new siding for $10,000 and your state charged 6% in sales tax. That’s potentially a $600 deduction.
Use the IRS’s online sales tax calculator to figure out the total sales tax you can deduct. Have the receipts to prove you paid the sales taxes.
Forms you need:
- 1040x
- Schedule A for the year you’re amending
4. Property Tax Deduction
Get a copy of your tax bill payment from the local tax office that collects the bill. Make sure you deduct the property tax expense on your amended return for the year you paid it, which could be different than the year it was due.
Forms you need:
- 1040x
- Schedule A for the year you’re amending
5. Home Repair Deduction
Red alert: You can’t claim deductions for any old home repair. There are only two narrow, possible ways to claim home repairs, and it’s always best to check with a tax pro for your particular situation:
If part of your home is used for business and you aren’t taking the standard deduction for your home office: You can only claim repairs made to your home office or claim a percentage of the repairs you make to the house as a whole, like repainting or patching a roof leak.
If 10% of your home is office, you can deduct 10% of the repainting or patching. If the repair is to the office itself only, then the percentage generally does not apply.
Forms you need to amend tax return:
- 1040X
- Form 8829 and Schedule A (if you’re employed by someone else) for the year you’re amending
- Schedule C (if you’re self-employed) for the year you’re amending
For casualty losses: Calculating and deducting casualty losses (disaster, damages, robbery) is complex. Everything from your income level to how you value your property can affect overlooked deductions. Besides placing a value on your personal property, you have to subtract a number of things from that, including insurance reimbursement and a percentage of your adjusted gross income.
Read IRS Publication 547 and consult a tax adviser.
Note: You can claim losses from federally declared disasters either in the year they occur or, if it’s more favorable, on the preceding year’s taxes.
Forms you need to amend your tax return:
- 1040X
- Form 4684 for casualty and theft for the year you’re amending
- Schedule A for the year you’re amending
This article provides general information about tax laws and consequences, but shouldn’t be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice.