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The Tax Advantages of a New Kitchen and Bath

tax breaks calculator

Tax day is around the corner and many will be submitting tax returns, if they haven’t already. There are several tax advantages of being a homeowner and making improvements to your home.

The amount Americans pay is based on the income they earn from their jobs, investments and other sources less deductions and credits. The most common tax credits for homeowners are a first-time homebuyer credit and expenses for childcare and home offices. A $1,000 tax credit will save you that much in taxes.

By comparison, a tax deduction lowers taxable income to amount equal to your marginal tax bracket. If you are in the 28% federal income tax bracket and you are entitled to a $1,000 tax deduction, your tax bill would be reduced by $280 (0.28 x $1,000 = $280).

Renovating an existing kitchen or bath may not provide immediate tax benefits, because those expenses are not deductible. However, they are factored into the value of your home when it’s 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’re 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 taxes if you are single and $500,000 in profit from taxes if you are married filing a joint return. Any amount of profit exceeding the $250,000 or $500,000 threshold is taxed as a capital gain. 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 2005 and $30,000 renovating your master bath in 2010, then the basis of your original purchase price for tax purposes would be $280,000. If you sold the home for $900,000 in 2016, the profit on your home would be $900,000 – $280,000 = $620,000. If you are married and filing a joint return, you would have to pay long-term capital gains tax on $120,000 of profit. IRS will only allow you to increase the cost basis of our 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 benefits of owning a home and making improvements to it include the ability to deduct the interest you pay on both original mortgages and home improvement loans (or equity lines of credit). Real estate taxes also are deductible.

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. We would welcome the opportunity to show you how to make your dreams a reality by giving us a call at 216.245.4522 or visiting our showroom at 26050 Richmond Road in Bedford Heights. Please note, we don’t claim expert status on taxes, so be sure to consult a qualified tax expert before taking any action based on what you read here.


How to Get the Lux Look Without Spending a Fortune

kitchenImagine how much more enjoyment you would get from your home if you could remodel your kitchen? Picture yourself at a beautiful waterfall countertop peninsula island with friends and family all participating in meal preparation, enjoying a favorite beverage and discussing the events of the day – that’s priceless. Our prospective clients typically ask how much a new kitchen costs? The answer – it depends. The investment can range from a low of around $20,000 to more than $100,000. There are numerous factors that affect project cost. Moving walls, electrical, plumbing, gas and other infrastructure items behind walls will add to the price tag.

Here’s how we create value and help assure that budgets are stretched to meet kitchen-remodeling goals. We start with the right layout. Kitchens not only have to be beautiful, they also need to be functional. The work triangle is a term used to describe the distance between the stove, refrigerator and sink. We design to make sure that this triangle has the smallest footprint possible. Typically, but not in all cases, we locate the refrigerator close to an entrance to the kitchen because the refrigerator is the most used appliance in the kitchen.

Kitchen cabinets typically account for 35% of a remodel budget. Cabinets come in standard sizes, which leads some designers to believe that cabinets are not that interesting. We could not disagree more, and this is where homeowners who work with gifted designers can stretch their renovation dollars significantly. There is a wide array of cabinet options that come in standard sizes but can be tweaked to give a custom look without the custom price tag. Unless there is a space limitation, we can stretch renovation budgets by specifying taller cabinets that give our clients more storage space and options. The difference between a 36-inch and 42-inch wall cabinet equate to another shelf of storage space in the kitchen. The ability to identify a cabinet that meets your budget and aesthetic goals is one of the distinctive competencies of a professional showroom.

We also know where the greatest returns on investments are in a remodel. One is to allocate more resources to the backsplash. Backsplashes account for a significant portion of the visual space in a kitchen. Plus backsplashes provide our clients with an opportunity to make a personal and unique design statement. Additionally, you don’t have to spend a fortune to achieve your goals.

Little details matter a lot. Hardware for your cabinet doors and drawers is comparable to the jewelry you select when going out for a night on the town. It makes a huge difference but does not have to have a Tiffany price tag. You can make a striking statement with the right hardware.

Lighting provides another opportunity to obtain a lux look on a limited budget. Lighting is primarily responsible for how your new kitchen will look and feel. When you compromise the quality of light, you compromise the entire project. Today, lighting technology offers unlimited options to create different moods and feelings every time you use your kitchen. Plus, pendants, chandeliers, under cabinet, in drawer in cabinet, under cabinet and well placed in-ceiling lighting offers another opportunity to express your individual style within a defined budget.

Flooring represents an opportunity to stretch budget dollars as well. Large ceramic tiles installed diagonally give a rich impression. In kitchens with an open floor plan, we encourage our clients to use wood flooring that matches the rest of the house to provide a consistent look.

Are you unsure if you have the budget to renovate your kitchen and achieve your goals? Please give us a call at 216.245.4522, or come to our showroom located at 26050 Richmond Road, Bedford Heights, OH 44146….We can provide you with a plan that meets your budget and your dreams.

From Design to Completion – A Customer Experience

Many people come to us wanting to update their kitchen or bathroom.  The reasons are always different, but the experience is similar.  While it’s easy to see the end of the process through reviews, it is a lot tougher to know what the whole process is like.  We recently worked with some people on a kitchen remodel and asked them to help define the process from start to finish.


TJ and his mother, Joyce came to us when they were “flipping” a house because the kitchen needed updates in order to help attract potential buyers.  They chose to work with Designer Cabinets Granite & Tile and Stoneworks because they wanted to partner with a company that would go out of their way to help them.  TJ commented, “Service and a great selection were important to us.  Designer Cabinets Granite & Tile had both.”


One of the things we do when working with people is assign them a designer that walks them through the process.  A designer will sit and listen to homeowners as they lay out their dreams and goals for their space.  Then they’ll help create a space that everyone is happy with.  In this case, Hannah McGowan of Designer Cabinets Granite & Tile  and Stoneworks pitched in to help.  When asked about working with Hannah, TJ said, “Hannah was awesome!  She was always positive and helpful.  In addition, we appreciated her ‘eye’ for design, which helped us as we made choices.”



While countertops are usually what people notice when looking at a remodeled kitchen, cabinets are also a part of the mix and that’s where Designer Cabinets, Granite & Tile came in.  The selection of cabinets can always be dicey if you don’t know exactly what you’re looking at.  This is the area where Hannah matched her expertise with what TJ & Joyce wanted.  The combination of countertop and cabinet came together well.


Once the project got underway, we took measurements and fabricated the materials right here in our facilities.  Adam Abrams, with both Designer Cabinets Granite & Tile and Stoneworks said, “This is a time that homeowners are looking for updates on what we’re doing at every step and that’s exactly what we were able to do.”


In the end, TJ & Joyce got exactly what they were looking for.  They got a kitchen that’s the envy of the neighborhood and used it to put the house up for sale.  Their reaction when they first saw the finished project was brief but powerful.  “Wow.  It was all we could say,” said TJ.  When asked if they would work with both companies again, TJ didn’t hesitate.  He had another project in mind and he, Joyce and Hannah sat down and started planning again.


As you think about your bathroom or kitchen project, let us show you how easy it can be to realize your dreams, whether it means putting together your dream kitchen or bathroom or flipping a house.  Contact us today and get the process started.


Porcelain Tiles Go Great in Bathrooms!

Homeowners face no shortage of options when it comes to kitchen and bathroom countertops. With the range of colors and types of materials available on the market today, you can have the bathroom of your dreams at a price you’re willing and able to pay.

Remodeling your bathroom is a great way to increase the value of your home without a huge financial commitment. If you feel your bathroom is ready for a makeover, consider using tiles instead of other materials. There are several reasons why porcelain tiles are an excellent choice for your bathroom. Below are five of them. Click here to read more »

14 Kitchen Backsplash Ideas

We have seen a lot of interesting and unique ideas for cabinets and countertops in our time serving Ohio. Of these, we have several favorites, especially when it comes to creative backsplash designs. Here are a few ideas you might consider trying in your kitchen.

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