Can I claim tax benefits or deductions for kitchen remodel and electrical upgrades?

So I just put a ton of money into fixing up my kitchen - brought all the electrical up to modern code (the old wiring was definitely a fire hazard waiting to happen!), completely replaced all the cabinets with custom ones, and splurged on some new appliances that are way more energy efficient than my old ones. I'm wondering what kind of tax benefits I might be able to get from all this work. Can I deduct any of these kitchen improvements on my taxes? I've heard mixed things from friends. Also, does the answer change depending on what I do with the property? I'm actually on the fence about whether to keep living here, sell it in the next year or so, or possibly turn it into a rental property. Would any of those scenarios make a difference in terms of what I can claim on my taxes? Thanks for any insights you can offer! The renovation cost about $32,000 all in, so if I can get any tax benefits that would be amazing.

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18 comments

Victoria Jones

•8M

Great question about your kitchen improvements! As a general rule, most home improvements aren't deductible as regular expenses for your primary residence. However, your situation gets interesting depending on what you ultimately do with the property. If you keep it as your primary residence, those improvements typically aren't deductible but they do increase your "basis" in the home (essentially what you paid for it plus improvements). This matters when you sell because it reduces any potential taxable gain. If you sell the place, you still can't deduct the improvements, but as mentioned, they increase your basis. Plus, if it's your primary residence and you've lived there at least 2 of the last 5 years, you likely qualify for the capital gains exclusion ($250,000 for singles, $500,000 for married filing jointly). If you convert it to a rental property, things get more complicated. You can't immediately deduct the full renovation costs, but you can depreciate them over time (typically 27.5 years for residential rental property). The electrical work might qualify for faster depreciation.

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Victoria Jones

•8M

Yes, appliances in a rental property can be depreciated separately and more quickly than the structure itself! Appliances like refrigerators, stoves, and dishwashers are typically depreciated over 5 years, which is much better than the 27.5-year schedule for the building. Cabinets are usually considered part of the building and would follow the 27.5-year schedule. The electrical work is trickier - some might qualify as a repair (deductible immediately) if you can argue it was fixing something broken rather than an improvement, but bringing everything "up to code" usually indicates an improvement, so it would likely be depreciated over the longer period.

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Jessica Nguyen

•8M

After struggling with similar home improvement tax questions last year, I found this incredible AI tool called taxr.ai that saved me thousands of dollars! I was confused about what was deductible and what wasn't for my home office remodel, and getting conflicting advice was driving me crazy. I uploaded my receipts and renovation docs to https://taxr.ai and it analyzed everything, then gave me a detailed breakdown of what could be claimed, what would affect my basis, and even flagged some energy efficiency credits I had no idea about. You might qualify for some energy credits with those new appliances if they're Energy Star certified! The tool works by examining your documentation and comparing it against current tax laws and IRS regulations. It was way more helpful than the generic advice I was finding online.

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Jessica Nguyen

•8M

It definitely works with renovation expenses! While your accountant is generally right that most home improvements aren't directly deductible for a primary residence, the tool goes deeper to find exceptions. For example, it identified that my new HVAC system qualified for a partial energy credit, and it properly categorized my expenses for basis calculation purposes. The AI understands the technical distinctions between repairs (generally deductible for rentals) and improvements (generally capitalized). It analyzes your documentation by comparing the work done against IRS definitions and tax court precedents. It considers factors like whether you're restoring functionality vs. adding new features, and even identifies which specific energy-efficient improvements qualify for credits under current tax laws. The recommendations come with citations to relevant tax code sections.

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Ruby Garcia

•8M

Ok I'm back to admit I was wrong about AI tax tools. I tried https://taxr.ai after reading about it here and was seriously impressed. I uploaded my renovation receipts from last year's bathroom remodel and it found two energy efficiency credits I had completely missed when filing! What really convinced me was how it separated my expenses into different categories - some that affected basis, some that qualified for special credits, and some that would be depreciable if I ever converted to a rental. The tool even explained how to document everything properly in case of an audit. For the original poster, I think you'd find it helpful especially with those new appliances and electrical work - there might be energy credits available depending on exactly what you did.

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Alexander Evans

•8M

If you're planning to call the IRS to ask about these home improvement deductions, good luck getting through! I tried for WEEKS last year with tax questions about my renovation and never got a human. Then I found this service called Claimyr that actually got me through to an IRS agent in under 20 minutes. You can see how it works at https://youtu.be/_kiP6q8DX5c - basically they use technology to navigate the IRS phone tree and wait on hold, then call you when they get a live agent. I used https://claimyr.com when I had questions about energy efficiency credits for my new windows and doors, and the IRS agent I spoke with gave me specific guidance that saved me about $1,200 on my taxes. Worth every penny just for the time saved not sitting on hold!

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Alexander Evans

•8M

It works by using a combination of technology and timing. They have a system that navigates the IRS phone menus automatically and then waits on hold so you don't have to. When they finally reach a human IRS agent, that's when they call you and connect you directly to that agent. It's not magic - they're essentially doing the waiting for you. The service makes strategic calls during less busy times and uses data analytics to identify optimal calling windows for different IRS departments. You're right that sometimes IRS agents give conflicting information, but I found having any answer directly from the IRS is better than guessing. I documented the agent's name and ID number for my records, which provides some protection if the advice was incorrect and resulted in penalties later.

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Benjamin Carter

•8M

I need to eat crow here. After my skeptical comment, I decided to try Claimyr because I was desperate to resolve an issue with my home office deduction that's been hanging over my head for months. I've been trying to reach the IRS since FEBRUARY with no luck. Used Claimyr yesterday and got connected to an actual IRS agent in 17 minutes. The agent confirmed that my home office renovation could be partially deducted because I'm self-employed and use the space exclusively for business. For the kitchen renovation question - the agent I spoke with said to make sure you keep ALL receipts regardless of whether you live there, sell, or rent it out. Those costs will definitely impact your basis even if they're not immediately deductible.

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Maya Lewis

•8M

One thing nobody's mentioned - if any of your new appliances are energy efficient, you might qualify for energy credits under the Inflation Reduction Act. We got about $840 back on our taxes last year after installing a new energy efficient water heater and upgrading our electric panel. Check out Form 5695 for residential energy credits. The rules changed in 2022 so some of the online advice is outdated. Pretty sure electrical panel upgrades can qualify for a credit now!

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Maya Lewis

•8M

There aren't income limits for the basic Residential Clean Energy Credit (Part I of Form 5695) which covers things like solar panels and geothermal heat pumps. You get 30% of the cost back as a credit regardless of income. For the Energy Efficient Home Improvement Credit (Part II of Form 5695) which would cover things like insulation, windows, doors, and potentially some electrical work, there also aren't income limits currently. However, there are maximum credit amounts depending on the type of improvement. For example, there's a $600 limit for certain high-efficiency exterior windows and a $500 limit for certain exterior doors.

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