Upgrading Windows/Doors Proves Beneficial at Tax Time
Has the rare winter wave in Texas forced you to replace your
windows or doors? Or maybe you felt it was time to give your home a fresh new
look. Whatever the reason may have been, your home improvement project might
just save you a few bucks when you file your taxes.
The Inflation Reduction Act of 2023 has brought a lot of
changes to the tax code, including a new home improvement tax break. This tax
break is designed to encourage homeowners to invest in their homes and make
improvements that can increase their value, energy efficiency, and overall
livability. Here's what you need to know about the home improvement tax break
from the Inflation Reduction Act of 2023.
the home improvement tax break?
The home improvement tax break is a tax credit that allows
homeowners to deduct a portion of the cost of home improvements from their
taxable income. Specifically, homeowners can deduct 30% of the cost of
qualifying home improvements from their federal income taxes, up to a maximum
of $3,200 per year.
qualifying home improvements?
Qualifying home improvements are improvements that increase
the value or energy efficiency of your home. Examples of some qualifying home
Upgrading to energy-efficient windows, doors, or
Upgrading to a high-efficiency HVAC system or
Installing solar panels or a geothermal system
Home Energy Audits
It's important to note that not all home improvements
qualify for the tax break. For example, cosmetic improvements like painting or
landscaping do not qualify, nor do repairs or maintenance work.
you claim the tax break?
To claim the home improvement tax break, you'll need to keep
detailed records of the cost of the improvements, including any receipts,
invoices, or contracts. You'll also need to file IRS Form 5695 with your
federal income tax return. This form will ask for information about the cost of
your qualifying home improvements and the amount of the tax credit you're
It's important to note that the tax break is non-refundable, which means that it can reduce your tax liability but cannot result in a refund. If your tax liability is less than the amount of the tax credit, you will not receive a refund for the difference. Be sure to consult with a tax professional to see if you qualify for the tax break and for further information.
Improve your home?
The home improvement tax break from the Inflation Reduction
Act of 2023 is a welcome change for homeowners who are looking to invest in
their homes. By offering a tax credit for qualifying home improvements, the Act
encourages homeowners to make upgrades that can increase the value and energy
efficiency of their homes. If you're planning on making home improvements in
the near future, be sure to reach out to Expo Home Improvement for all of your
energy-efficient window and exterior door needs.