Keep Those Home Improvement Receipts

August 15, 2012 | Kate Horrell

I have never had a perfect receipt storage system.  Usually it is no big deal, but there is one department where it can be really expensive if you don’t hang on to your receipts:  home improvements.

For example, once upon a ridiculously long time ago, my husband and I bought a house.  We were young and inexperienced, so we didn’t save every last receipt for window coverings and extra insulation and fences and sheds.  When we go to sell that house, I am really going to regret not having all those receipts because they change the cost basis of the house for purposes of capital gains taxes.

What can you do?  First, start early and be diligent.  Make a file folder just for home improvement receipts.  Photocopy them so you don’t find yourself with blank paper as the ink degrades.  Better yet, scan them and keep a copy in the cloud, plus somewhere in your own system.

If you’ve failed to start at the beginning, like me, you can still start saving now.  Most home improvements will require replacement eventually, even big things like sheds and fences.  If you own the house long enough, you’ll eventually accumulate a receipt for everything.

Not only will this possibly help save taxes, it also comes in handy when your dishwasher dies at the 11 month mark.  No receipt, no warranty (probably.)

In addition, military folks seem to become landlords more often than average homeowners.  Receipts help you to properly depreciate the things in your house, which makes your yearly federal income taxes more accurate and, hopefully, less expensive.

Do as I say, not as I’ve done in the past.  Hold on to those receipts, each and every one of them.  You’ll be glad you went to the effort.

Comments

  1. scott says:

    if your house did not gain over 250,000 bucks you saving reciepts is fruitless check with the irs