Most people want to buy new windows or shades at some point. They may cost more than you would expect and many people don’t feel comfortable paying for them. Fortunately, you may be able to take advantage of some federal energy tax credits.
Requirements for the Federal Energy Tax Credit
The Federal Energy tax credit is meant to help homeowners save money on shade systems and other home improvements that can help them save energy. There are a few requirements that you need to meet to be eligible for this credit:
- The improvements must clearly make your home more efficient. You should check the government’s Energy Star website to see if the new improvement will qualify. Window improvements generally need to help prevent heat exchange.
- You must be the owner of the house that you intend to use the new windows or furnishings. The current tax credit can’t be used for rentals, although that could be changed in the future.
- The home must be your primary residence. You won’t be able to get a credit for something that you will use on a vacation property.
You will want to familiarize yourself with these requirements so that you can buy windows or shades that will qualify.
How Do You Deduct the Credit?
You will need to deduct the tax credit when you file your 1099. You will need to file for that credit on Form 5695.
The form needs to be submitted by the deadline to file taxes. Make sure that you have receipts from the manufacturer, because the IRS won’t allow you to receive a credit without them.
How Long Can You Claim Tax Credits for?
The tax credits were originally supposed to expire this year. However, Congress decided to extend most of them. Some energy tax credits will be available until the end of 2016.
You will want to pay close attention to the deadlines and any changes that may be made. Make sure that you claim your credits while you still have the chance. This means that it is a good idea to buy more energy efficient windows or window furnishings within the next three years to save money on them.
Is it Worth Making Improvements to Your Windows?
You will want to do a cost-benefit analysis before making any changes to your home. Energy efficient windows and improvements tend to cost a lot more. However, they can easily pay for themselves over the long-term. Some experts predict that an energy efficient window or window furnishing can pay for itself within seven to ten years.
The tax credit can make them even more affordable. Many federal tax credits will allow you to save up to 30% off the cost of your improvements without any upper limit. This means that you could break even in five to seven years.
It is a good idea to research your options and see if any fit your needs. Make sure that the products are approved by Energy Star so that you can get the federal tax credit.
About the author: Kalen shares tips about saving money and living a more environmentally friendly lifestyle at the same time. You can do this by purchasing products from Sunesta.com and can learn more here.
Category: Home Renovation