Using the IRS Sales Tax Deduction Calculator (https://www.irs.gov/credits-deductions/individuals/use-the-sales-tax-deduction-calculator) users are asked if they purchased (or started a long term lease) for big ticket items like Motor Vehicles, Boats, Aircrafts, a Home, or a Home Renovation. I've searched everywhere and cannot seem to find an answer to what constitutes a home renovation? I understand that the following conditions must apply in order in order to deduct the sales tax on a home renovation:You're itemizingYou're taking the sales tax deduction, as opposed to the state/local income tax deductionThe tax rate is equal to your state and local general sales tax rateYou (or your contractor acting as your agent) purchased the building materials and paid the tax However, I want to know, what constitutes a home renovation? Would major projects like replacing a furnace, a replacing an electrical panel, replacing windows or doors? Or does it need to be more substantial than that?

Question

Sales Tax Deduction - Home Renovation

Forum|Forum|3 years ago
May 19, 2023
1 reply
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Using the IRS Sales Tax Deduction Calculator (https://www.irs.gov/credits-deductions/individuals/use-the-sales-tax-deduction-calculator) users are asked if they purchased (or started a long term lease) for big ticket items like Motor Vehicles, Boats, Aircrafts, a Home, or a Home Renovation. I've searched everywhere and cannot seem to find an answer to what constitutes a home renovation? I understand that the following conditions must apply in order in order to deduct the sales tax on a home renovation:

You're itemizing
You're taking the sales tax deduction, as opposed to the state/local income tax deduction
The tax rate is equal to your state and local general sales tax rate
You (or your contractor acting as your agent) purchased the building materials and paid the tax

However, I want to know, what constitutes a home renovation? Would major projects like replacing a furnace, a replacing an electrical panel, replacing windows or doors? Or does it need to be more substantial than that?

rjs

Employee

The IRS instructions for Schedule A use the terms "substantial addition" or "major renovation." I have not seen any more detailed definition of those terms. But in my opinion, your examples of replacing various things do not amount to a substantial addition or major renovation.