Tax refund? Home improvements are worthwhile ways to invest it

Iris Price | Improvement Center Columnist | April 2, 2015

No one likes paying taxes, but if you are one of those who overpaid the IRS throughout last year and they owe you a tax refund, home improvements are a smart way to invest your windfall.

Even if you get less than a hundred bucks back, you can still do some sprucing up, rearranging, and reorganizing to make your home environment feel fresh. Whether you're planning to live in your home for decades or thinking about selling it this year, here are some suggestions for what your tax refund dollars can help you buy in home improvements. Remember that if you need help with installation, that may add to your cost.

Tax refund: home improvements based on what you get back

Under $100:

  • Paint. Invest in a fresh coat of neutral color paint for a dingy or unusually colored room, especially if you are planning to list your home. If you know you'll be staying put for a few years, indulge in painting an accent wall or an entire room in a favorite trending paint color. New paint can instantly improve the appearance of a room, either for buyers or yourself. A gallon of matte finish interior latex paint runs about $24 per gallon and up, plus the cost of rollers, brushes, drop cloths and other painting equipment you might need.
  • New kitchen cabinet hardware: New handles or pulls cost from under $2 each and up. A small kitchen may have as many as 25 doors and drawer fronts or more; large kitchens can have many more, but it's a relatively inexpensive way to revive tired cabinet doors.
  • Storage containers. Drooling over the clever organizing systems at The Container Store when you have less than a c-note to spend can only frustrate you. Get the most bang for your buck on simple but effective storage solutions at a dollar store. Even discount stores like Target and Walmart carry enough of an assortment of bins and baskets to corral all the little things that have been making it hard to find what you need on your shelves and in your cabinets, closets and drawers.

Between $100 and $500:

  • Bath and kitchen upgrades. Replacing old, lime-encrusted faucets with some shiny new ones can breathe life into a tired bathroom or kitchen. Touchless bathroom faucets run about $250 and up at The Home Depot. A touchless Moen kitchen faucet from Lowes is under $400. You can buy a single vanity set for your bathroom from around $270 to under $500. Have everything but the kitchen sink? Floor & Decor offers an 18-by-30 inch travertine farmhouse sink for $399. They also carry travertine flooring for as low as $1.99 per square foot tile.
  • Ready-made closet organization system. Custom closet systems can be costly, but some ready-made organization systems like the Simplicity 10' Closet Organizer or an 8' Martha Stewart Living closet kit are under $500.
  • Professional home organizer. The going rate for a professional home organization expert is around $100 an hour. A five-hour session generally consists of decluttering and reorganizing a single area of the home, such as a kitchen and pantry, a bedroom, or a home office. If you are planning to sell your home, this might be an essential part of making it ready to stage for buyers. If you plan to stay in your home and make additional home improvements but don't know where to start digging out from under months' worth of accumulated stuff, having the help of a professional can be an invaluable expenditure.

Between $500 and $1,000:

  • Quiet dishwasher. Few things in your kitchen can be as consistently disturbing as a noisy dishwasher interrupting your evening activities after dinner. If your tax refund home improvement is nothing more than a quiet dishwasher, it can boost the quality of your home life immeasurably. KitchenAid makes a 46-decibel dishwasher that is one of the quietest you can find, even among more expensive brands.
  • Electric radiant heat bathroom floor. If you have a small bathroom and want a radiant heated floor, choose a less expensive stone or ceramic tile flooring to keep costs down. A kit that includes the heating membrane, cables and programmable thermostat to heat 60 square feet of flooring runs $723 at The Home Depot.
  • Built-in fire pit. You may not need one, but if you enjoy your patio in the evening and into the cooler months, you'll appreciate either a gas or wood-burning fire pit, either of which can be built for under $1,000. Be sure to first check local codes, permitting, and homeowner's insurance implications.

If you are lucky enough to get $1,000 or more tax refund, home improvements under $2,000 that offer good return on investment include a small (250 square foot) wood deck, a steel entry door or a garage door replacement. As long as you don't need that refund to pay existing bills, spending it on upgrades for your home that you've needed or wanted all year can be a rewarding investment.

Photo credit to Nam Phan

About the Author

Iris Price is a single Baby Boomer whose antidote to a lack of retirement funds was to launch a long-delayed career as a writer. While others her age concoct bucket lists and travel the world, she bought a new-construction home and obsessively creates lists of must-have home improvements and personal realization goals. She specializes in writing about home services and self-motivation.