How Much Can Windows and Doors Save You Come Tax Time?
Once again, the House of Representatives (12/3) and Senate (12/16) have come together to approve taxes retroactive to 2014, just in time for Christmas. Now, this may not seem like the Christmas gift you may have wanted, but think of the consequences had this bill not passed. Yet another one-year extension, the extension will still allow homeowners to take advantage of this year’s purchases for their homes—specifically in energy efficient windows and doors.
So, this means that not only will new windows and doors be one of the most valuable things you can do for your home, it may even save you some cash come tax time.
The 25C Homeowner Tax Credit
An important part of the extension was the 10 percent “25C” homeowner income tax credit of up to $200 for installation of Energy Star qualified windows and skylights, and $500 for Energy Star exterior doors. Both are subject to a $500 lifetime limit per individual taxpayer.
To receive this credit, homeowners must install Energy Star rated windows or doors in 2014 and fill out form 5695 to be eligible. For the entire text, please visit Legal Information Institute, 26 U.S. Code § 25C – Nonbusiness energy property.
Key terms are as follows, provided by the IRS.
- This credit is worth 10 percent of the cost of certain qualified energy-saving items you added to your main home last year. This includes items such as insulation, windows, doors and roofs.
- You may also be able to claim the credit for the actual cost of certain property. This may include items such as water heaters and heating and air conditioning systems. Each type of property has a different dollar limit.
- This credit has a maximum lifetime limit of $500. You may only use $200 of this limit for windows.
- Your main home must be located in the U.S. to qualify for the credit.
- Be sure you have the written certification from the manufacturer that their product qualifies for this tax credit. They usually post it on their website or include it with the product’s packaging. You can rely on it to claim the credit, but do not attach it to your return. Keep it with your tax records.
To print out IRS Form 5965, click here.
What if I Haven’t Installed in 2014?
Of course, this is a main concern of homeowners looking to take advantage of new windows or doors, but in the article “Tax Cuts in 2015?” author Rich Walker believes that this one year extension will be extended in the future, possibly permanently. Walker is quoted in his article:
“GOP lawmakers sought to make some of the tax cuts permanent, but a tentative package negotiated with the Senate ran afoul of a presidential veto threat. Still, the effort to reduce the tax load and level of uncertainty for businesses is not dead. The Wall Street Journal quotes Rep. Paul Ryan (R-WI), who will become House Ways and Means Committee chairman when the new Congress convenes in January, as saying that he will work to overhaul the federal tax code, with a focus on cutting the corporate tax rate.”
We can expect that these cuts will be in action in 2015, so if you are looking to save money come tax time 2016, be sure to get your windows and doors in 2015.
Blue Sky Builders offers vinyl replacement windows for your home or garage. Coming in a wide variety of sizes, patterns, and colors, our windows are backed with an Alliance AssurancePlus Lifetime Warranty.
If you’re looking for doors, we have those too. Providing top quality steel entry doors, we install doors that ensure safety and security along with energy efficiency.
Contact us today to see how you can become one of our first installations of 2015!