By Megan Wild
It's sometimes tough financially to make home improvements. Many home improvements cost around four digits, and some cost even more. Unless you've been saving for a project, you're unlikely to have that kind of cash lying around.
Enter your tax return. If you're receiving a sizable chunk of change, it acts almost as an automatic savings account. Suddenly, you have money you didn't have before.
Whether your tax return equals $500 or $5,000, you can use it to cross some home refurbishments off your list that improve your home's livability and appeal. Some improvements even enhance your home's energy efficiency, which lowers your cost going forward.
Here are seven home improvements that either make your home more fun, enhance its appearance or improve its energy profile:
Remodel the Kitchen
Full-scale kitchen remodels—replacing and redoing everything in the kitchen—can cost more than the average tax return. Instead, you can remodel effectively by picking certain elements of the kitchen you want changed.
Look around and see what you most want to redo. Are the cabinets old and dated? Upgrade to new wooden cabinets with sturdy handles and pulls; you have a variety of stains to choose from. Are your appliances 20 years old and counting? You'd be wise to replace them. Stoves, refrigerators and dishwashers should be traded in after two decades of use. Countertops still Formica or tile? Gleaming marble might be in your future.
Refurbish the Bathroom
Bathrooms tend to look dated if they haven't been upgraded in a while. Like your kitchen, you can make your bathroom look wonderful for a relatively small sum of cash. Upgrade the fixtures with gleaming brass or pewter. Re-tile the floor in a modern pattern.
If your tax return is small, invest in items that will freshen up the bathroom. A new shower curtain combined with a few decorative tiles on the wall, plus a new towel holder, may be all you need to make the area shine.
Install Wood Floors
If you have carpet or old wood floors, give your home a beauty boost with new wood floors. These are even healthier, because wood floors are less prone to hold dust mites and bacteria from food and pet accidents that linger even after cleanup. Since many people love wood floors, this remodel can also increase the resale value of your home.
Wood flooring costs, on average, $7 to $12 per square foot or higher. Depending on the size of your tax return, you may want to replace only the flooring in a living room or master bedroom.
Invest in a Tankless Water Heater
If you're interested in energy-saving improvements and know you'll need to replace your water heater in a few years, doing so can be a top-notch use of your tax return. Tankless water heaters use less energy than the conventional storage tank kind. Why? Because they only use energy when there's a need for hot water: when someone turns on the faucet or tap.
With conventional storage tank water heaters, hot water held in the tank progressively loses heat, which is known as standby heat loss. These water heaters use far more power than tankless systems.
Energy-efficient home improvements may be tax-deductible. Be sure to check with your state and local authorities and your accountant for the most recent regulations. It can also tie in with home office deductions. If you use 10 percent of your home's space for a home office, for example, you can depreciate 10 percent of the cost of the tankless water heater's installation.
Increase Your Curb Appeal
Your curb appeal includes anything people see of your home from the road. Raising it can involve buying a new door, installing those antique-looking lamps you love on either side of the door and placing bright dwarf Japanese maples on either side of the home.
If you have a porch, now is your chance to landscape it. Do you love bamboo trees or certain cacti? Invest in a porch garden that will give you pleasure for years to come. Buy a wicker easy chair or a porch swing so the family can hang out together outside. The perfect porch gives you a nice way to spend a summer.
Build a Deck
If you like to spend time outside, build a deck—it can give your family hours of enjoyment. Even if you already have outside features such as a patio, a deck can add far more versatility. While patios are often just flat concrete, decks are wood, warm and inviting.
You can cook on a deck, design a mini flower garden or just relax and snooze in the sun. Decks are also one of the most popular features with homeowners nationwide, so the addition can significantly add to your home's resale value.
Replace the Heating or Cooling System
Replacing your heating, ventilation and air-conditioning (HVAC) systems is a great energy-saving improvement. You should replace HVAC systems every 20 or so years. If you live in an older home, it's likely that newer systems will be more energy-efficient, requiring less power to run.
If your HVAC system is separated into heating and cooling, and your tax return is smaller, you might choose one or the other to upgrade. This improvement will repay you in lower energy bills going forward.
While many people don't have the cash for home improvements month to month, you can use your tax return as the chunk of money you need to redo parts of your home. Improve the look, amount of fun and energy expenditure of your home this season. Have fun!
Megan Wild is a home improvement specialist who loves fixing up old homes and making them beautiful and functional again. When she's not writing, you can find her hiking in the great outdoors or tweeting housing information @Megan_Wild.
