- Days left
Remodeling projects pay offThe best kind of house to own is one that needs love. Even in the current downtrodden market, the price for a fixer-upper is significantly less than you'll pay for a home on which someone has lavished attention.

The good thing about buying a fixer-upper is you're not paying extra for someone else's idea of what looks great. You can put your own stamp on the property – make it just the way you like it – and still not spend as much as you'd probably pay if you bought the nicest house in the neighborhood.


Every year Remodeling Magazine does its Cost vs. Value Report. The latest report points out that despite declining home prices, the cost of materials and even labor haven't fallen very much. So when you calculate the percentage of return on improvements compared to the value of the home when they are finished, the result isn't very impressive. For some improvements like a home office remodel, which was hot a few years ago, the return looks really shabby.

You can see for yourself what pays off and what doesn't, but keep in mind, the prices cited here are probably higher than many of us do-it-yourselfers would ever pay. Even if you hire out just part of the work, you can save a bundle over the pricing in this report.

One of the best payoffs, according to this report, is getting rid of an old, wooden or fiberglass front door in favor of a new steel one. The cost referenced here is $1,172 installed, and that drives the value of the house up $1,470 or 128.9% of the cost recouped. Even if that's only half true, it's a job worth doing because a tight front door keeps out cold in the winter and heat in the summer. Plus, good security can make you feel safe and, maybe, even lower your insurance bill if you have green homeowner's insurance like this policy from Fireman's Fund.

You can certainly find a basic model, six-panel steel door at Home Depot or Lowe's. I found a plain but adequate one on sale for $99 that spruced up the look of the non-waterside entrance to my house on the lake. I hired a local carpenter to install it for $200, so the whole project cost me a little more than $300.

Because this door was Energy Star approved and met the standard for the Energy Improvement and Extension Act of 2008, I also could take a 10% federal energy tax credit this year -- or next, if I had purchased the door this year. Plus, the state of Michigan, where I live, offers a 30% state tax credit on the cost of the door. Most other states are offering similar deals.

Because tax credits are dollar-for-dollar subtractions from the amount of tax owed, they are particularly attractive benefits. They give my new door a special sheen.

Increase your money and finance knowledge from home

How Financial Planners go Grocery Shopping

Learn to shop smart and save.

View Course »

Investing in Real Estate

Learn the basics of investing in real estate.

View Course »

TurboTax Articles

What is IRS Form 8824: Like-Kind Exchange

Ordinarily, when you sell something for more than what you paid to get it, you have a capital gain; when you sell it for less than what you paid, you have a capital loss. Both can affect your taxes. But if you immediately buy a similar property to replace the one you sold, the tax code calls that a "like-kind exchange," and it lets you delay some or all of the tax effects. The Internal Revenue Service (IRS) uses Form 8824 for like-kind exchanges.

What are ABLE Accounts? Tax Benefits Explained

Achieving a Better Life Experience (ABLE) accounts allow the families of disabled young people to set aside money for their care in a way that earns special tax benefits. ABLE accounts work much like the so-called 529 accounts that families can use to save money for education; in fact, an ABLE account is really a special kind of 529.

What is IRS Form 8829: Expenses for Business Use of Your Home

One of the many benefits of working at home is that you can deduct legitimate expenses from your taxes. The downside is that since home office tax deductions are so easily abused, the Internal Revenue Service (IRS) tends to scrutinize them more closely than other parts of your tax return. However, if you are able to substantiate your home office deductions, you shouldn't be afraid to claim them. IRS Form 8829 helps you determine what you can and cannot claim.

What is IRS Form 8859: Carryforward of D.C. First-Time Homebuyer Credit

Form 8859 is a tax form that will never be used by the majority of taxpayers. However, if you live in the District of Columbia (D.C.), it could be the key to saving thousands of dollars on your taxes. While many first-time home purchasers in D.C. are entitled to a federal tax credit, Form 8859 calculates the amount of carry-forward credit you can use in future years, not the amount of your initial tax credit.

What is IRS Form 8379: Injured Spouse Allocation

The Internal Revenue Service (IRS) has the power to seize income tax refunds when a taxpayer owes certain debts, such as unpaid taxes or overdue child support. Sometimes, a married couple's joint tax refund will be seized because of a debt for which only one spouse is responsible. When that happens, the other spouse is said to be "injured" and can file Form 8379 to get at least some of the refund.

Add a Comment

*0 / 3000 Character Maximum