Federal Energy Tax Credit – Windows & Doors

IRS Energy Tax Credits - Tips for Windows & Doors

Here are some tips on how to take advantage of the IRS energy efficiency tax credits when you buy new energy efficient windows or doors:

1. Choose the right energy efficient product. You can go to the Energy Star government website to learn more about the requirements for qualifying windows and doors.
2. You only get a credit for product purchases- NOT installation. The 2009 thru 2010 energy tax credit for qualifying windows and exterior doors is 30% of the cost, up to $1500.  Remember, that’s a TOTAL of $1500. Not $1500 for windows, $1500 for doors, $1500 for roofing, $1500 for water heaters, etc. etc. You only get a maximum of $1500 in energy tax credits per tax year. (There are some exceptions. But for the most part this is the rule.)
3. Negotiate with your installers. Most of these window and door installers know that the labor is available for a tax credit. Therefore, they will often cut you a deal on the labor, but charge full price for the energy efficient door or window products. If this helps maximize your tax credit, it can be a very good thing.
4. Get written verification from the installer. You need to make sure you have verification that your window and door qualify for the tax credit. Get it in writing.
5. Save all receipts and paperwork.. Put copies of all paperwork in your tax files. You probably won’t need to mail them into the IRS ever, but in case you get audited, you need to be prepared to substantiate your tax credit.
6. Carefully complete the necessary tax forms. Consult a licensed CPA if you have any questions. You do not want to make a mistake when filing your tax return.

IRS Energy Tax Credits – A Real World Example

I purchased 10 replacement windows and two sliding glass doors and had them installed for $6900. The Milgard brand “Tuscany’ windows and sliding glass doors met the Energy Star energy ttax credit requirements. (I did my own research on the product and RS Windows and Doors verirfied it in writing.) therefore, when I do my 2009 taxes (due April 15, 2010) I’m going to file the IRS Tax Form 5695. Here’s is the basic calculation of my credit:

$1,500 = Total price for installation
$5,400  = Total price for windows and doors
$6,900 = Total price for Windows/Doors AND installation

$5,400 x 30% energy tax credit rate = $1,620, which is then maxed out at $1,500.

My total energy tax credit for 2009 is $1,500.

NOTE: This article is for basic information only. Please consult a professional CPA for all tax matters including tax planning and tax preparation. VenturaWindow.com is not liable for any of your tax issues that may occur.