A bathroom remodel can be a significant investment, but can you write it off on your taxes? The short answer is: sometimes. Whether you can claim deductions depends on how the remodel is used and categorized.
When a Bathroom Remodel May Be Deductible
1. Home Office Deduction
• If your home has a dedicated home office and you remodel a bathroom exclusively used for business, you might be able to deduct a percentage of the cost based on your office’s square footage in relation to the total home size.
2. Rental Property or Business Use
• If you own a rental property, remodeling costs may qualify as business expenses, making them deductible. However, they are often depreciated over time rather than deducted all at once.
3. Medical Necessity (Medical Expense Deduction)
• If the remodel is done to accommodate a medical condition (e.g., adding grab bars, widening doors, or installing a walk-in tub), it may qualify as a medical expense deduction. However, only costs that exceed 7.5% of your adjusted gross income (AGI) are deductible.
When a Bathroom Remodel Is NOT Deductible
• If the remodel is purely for personal enjoyment or aesthetics, it does not qualify as a deduction.
• Most home improvements increase your home’s value and are considered capital improvements, meaning you may not see a tax benefit until you sell the home.
How to Maximize Tax Benefits
• Keep all receipts and documentation related to the remodel.
• If eligible, consult a tax professional to ensure you claim the right deductions.
• Consider whether your remodel adds value that could qualify for capital gains tax benefits when selling your home.
While most bathroom remodels won’t be an immediate tax write-off, there are strategic ways to reduce your tax burden if your remodel qualifies under business, rental, or medical expense categories.