Posted on April 30, 2018
April 17 is around the corner and we realize that many of our existing and future clients will be submitting their 2017 tax returns. This week we will review the impact of the new 2018 tax law on making improvements to your home.
The amount of tax that Americans pay is based on the amount of income that they earn from their employment, investments and other sources less permitted deductions and tax credits. Tax credits reduce tax liabilities. Common credits include the child tax credit, which doubled to $2,000 per child under 17 with the new tax law and can be taken by single parents who make up to $200,000 and married couples whose income is less than $400,000. A $2,000 tax credit will reduce your tax liability by $2,000 and save you $2,000 in taxes.
By comparison, a tax deduction lowers taxable income to an amount equal to your marginal tax bracket. If you are in the 32 percent federal income tax bracket and you are entitled to a $1,000 tax deduction, your tax bill would be reduced by $320 (0.32 x $1,000 = $320).
How you finance renovating an existing kitchen or bath will have different tax consequences in 2018 and beyond. The Internal Revenue Service recently posted on www.IRS.gov that homeowners can deduct interest on home equity lines of credit and equity mortgages provided the funds are used to purchase a home or to repair or improve the property. That means if you use a home equity line of credit or second mortgage to pay for your new kitchen or bath remodel, you can deduct the interest payments on those loans up to a certain limit. The new tax law caps interest on loans up to $750,000 for married couples and $375,000 for singles. If the combined home equity and initial mortgage loan exceed those limits, interest paid above those amounts is not deductible.
If you fund renovations from savings, you most likely will not receive immediate tax benefits, because using savings does not provide an immediate deduction. However, those funds are factored into the value of your home when it is sold. When a home is sold, the IRS requires sellers to pay taxes on the difference in the original price owners paid for the home and the sale price of the home. The amount of tax you pay depends on how long you have owned the home and if you are single or married and file a joint return.
If you owned the home for five years and lived in it as your principal residence for two of the five years, you can exclude $250,000 of the profit from capital gains taxes if you are single and $500,000 in profit from taxes if you are married filing a joint return. However, improvements you have made to your home that increase the home’s value substantially while you have owned it can reduce your tax exposure even more.
If you purchased your home in 1980 for $200,000, spent $50,000 renovating your kitchen in 2018 and $30,000 renovating your master bath in 2019, then the basis of your original purchase price for tax purposes would be $280,000. IRS will only allow you to increase the cost basis of your home if the improvement adds substantial value such as new kitchens and bathrooms, additional rooms, new roofs, etc. Check with your tax professional to determine which improvements would help raise the base of your home.
Additional tax benefits of owning a home and making improvements to it include the right to deduct the amount of interest you pay on both original mortgages and home improvement loans (or equity lines of credit). Real estate taxes also may be deductible up to a limit of $10,000.
When you are considering a new kitchen or bath, do not overlook the potential tax benefits associated with making substantial improvements to your home or the ability to deduct interest on a home improvement loan. More important than a possible tax benefit is a new kitchen and bath make your life easier, more enjoyable and rewarding. That’s priceless.
We would welcome the opportunity to meet with you and discuss your ideas for remodeling. Give us a call at 781-749-6777 or send an email to firstname.lastname@example.org. Please note, consult a qualified tax expert before taking any action on the guidance in this blog.
Posted on March 21, 2018
A recent analysis of kitchen trends by one of the largest manufacturers of kitchen cabinets in North America offers some interesting insights to help you plan your kitchen remodel.
To learn how you can capitalize on new technologies, storage solutions and the latest industry trends to help create a dream kitchen we’d love to meet with you! Give us a call to set up an appointment: 781-749-6777.
Posted on November 20, 2017
Not many of our clients think about grout color when they are selecting a tile. Sometimes when we bring it up the client seems surprised that it’s a decision they even need to be involved in. Sometimes they look panicked like – I thought I was done with tile decisions!Grout is definitely not as sexy as the tile itself however it can have a dramatic impact on the look and feel of the tile. For example, white subway tile has been a staple for kitchens and is not going away anytime in the foreseeable future. If white tile is paired with white grout, the distinction between the tile and grout disappears creating a look that does not typically catch the eye.
Below are some examples of kitchens that have white tile & white grout…
Photo by WING Ta via Domino
Designed by Studio McGee
Photo by Mia Baxter via Domino
Designed by Becki Owens via Domino
A grout color that contrasts with white or lighter tiles makes a definitive distinction. We also tend to avoid white grout because it takes extra effort to clean and maintain. We often contrast white tiles and white based tiles with a soft gray grout especially in traditional or transitional designs because of its timeless look and its ability to complement Shaker-style cabinets, veined stone counters and wood floors.
Here are some other kitchens where they have used a soft grey grout to contrast with the tile…
Designed by Studio McGee
Photo by Jeremey Liebman via Domino
Kitchen from the movie “The Intern” from Warner Bros.
Another popular trend with white tiles, especially backsplashes, is to pair them with darker colored grout to create a look that makes the tile a focal point of the kitchen.
Photo by Brittany Ambridge via Domino
Designed by Studio McGee
The same rules apply when using dark tiles for flooring or wall coverings. Lighter colored grout serves to contrast the tile and highlight patterns.
We like to recommend a colored grout to help highlight other colors in the kitchen or bath. Colored grouts are also often paired with colored and patterned tiles. But this can be tricky if you are not familiar with color schemes and contrasting colors that complement one another. Using white or light grout with colored tiles helps to soften the space and provide cleaner lines. When clients opt for a bright red or orange colored tile, we would pair that with a white grout.
The finish of the tile is another consideration when specifying grout. If the tile is glossy, it will appear lighter on a wall surface. A lighter grout color works best with glossy tiles.
Tile is not the only material that affects how grout looks and feels in a new kitchen or bath. We account for surrounding materials and other color schemes specified for the kitchen. Incorporating brown and red tones into grout serves to complement brick, wood, leather and stone.
There are also different considerations for floor tile than backsplash or wall tile seen at eye level. We often recommend contrasting the tile and the grout to add richness to the look.
Color is only one factor to consider when specifying grout. Another is thickness. If the grout matches the tile, we recommend a thin grout application to give the appearance of one continuous material. The shape of the tile impacts the grout thickness. For circular tile, often used on bathroom floors and shower bases, we suggest using a thicker grout pattern to make the tile stand out. When we work with bathrooms that have multiple tiled surfaces we tend to specify the same color grout for both walls and floors to help assure a harmonious look.
Understanding the effect grout color, thickness and applications have on a new kitchen or bath project is essential to make our clients smile.
Posted on November 17, 2017
We are sooo excited to be featured on Fireclay Tile’s recent blog posting Project Spotlight: Refreshed Neutral Kitchen! We recently completed a kitchen reno in Quincy for a young couple who wanted a fresh & modern feel for their home and growing family. They were open to color & pattern. They really wanted the space to be fun and have a touch of whimsy. We couldn’t be happier with how everything turned out!
Check out the link below for the full feature…
Reviewing the tile installation & pattern with the tile installer was crucial as each tile is handmade and the Ogee Drop can be positioned in various ways to create different patterns. We opted for the Moroccan pattern to create movement and visual interest for the backsplash. It also creates a nice contrast to the linear, modern styling of the cabinetry & counters.
Here is a pic of of the final installation. For more pics head to our gallery or check us out on Fireclay Tile’s website!
Posted by Tara L. Callow
Posted on November 17, 2017
Cabinet hardware is the jewelry of the kitchen. It’s the finishing touch for cabinetry and can make a unique design statement. Hardware placement should not be an afterthought. We always review the placement with the client and with the installer to assure that the finished product makes our client smile every time they enter the room.
The most common hardware configuration we see these days in transitional kitchens is a handle on the drawers and a knob on the doors. In the more modern kitchens typically we see all handles.
We generally feel that centering handles on the drawers provides the beautiful symmetry that most of our client’s love. We start with the length of the chosen handle and then consider the width of each drawer. As a rule of thumb, if the drawer is 30” wide or more we look at whether two handles is the best option. Sometimes we need to use a mix of handle sizes if there are smaller drawers. For example, if the handle is 8” long and there is a 12” wide cabinet the handle will overwhelm the cabinet and look unattractive. If that’s the case hopefully the handle is offered in a smaller length. If the drawer is 9” wide (typically the smallest standard cabinet width) we usually place the coordinating knob on the drawer instead of the handle.
When our clients prefer only handles and no knobs there is a choice between placing the handles horizontally, vertically or a mix of both can look more interesting.
When placing knobs on the upper cabinet doors we like them about two inches up from the bottom edge of the door. It all depends on the design detail of the door and how the knob lines up with the lines in the door. On taller doors we might center the knob.
We always put a handle on the waste basket cabinet because it gets so much use and needs something sturdy. Typically, the door on this cabinet is attached to the basket and is pulled in and out many times a day.
The same goes for a dishwasher with a cabinet panel on the front. A handle is always the better choice for functionality.
Refrigerators with a cabinet panel front need a special appliance handle. Most hardware companies offer coordinating appliance handles which are heavier and will make it easier to open a fridge with a strong gasket seal.
Posted by Marlene MacDonald Ketchen