Home Improvement Deduction

[sj3339sta]

My husband and I will not have enough deductions to itemize this year. However, we did get some new windows for our house that qualify for that deduction. The sales guy at the store said we should be able to deduct the 30% of the cost even if we don't itemize.

Is that true?

[MN-Investor]

It's not a deduction; it's a credit. Credits are better than taxes, they are a direct reduction in your tax liability. Check out IRS Form 5695 Residential Energy Credits - www.irs.gov/pub/irs-pdf/f5695.pdf.

[TheOtherMe]

There is a credit for this type of purchase. The windows must meet the energy star guidelines that can be found here under the 2010 tab:

www.energystar.gov/index.cfm?c=tax_credits.tx_index

You can take a credit of 30% of the cost up to $1500. If you claimed any energy credits in 2009, your allowable credit for 2010 is reduced by that amount.

Windows must have been installed by December 31, 2010 at your principal residence.

Use Form 5695 to claim the credit. A credit offsets your taxes dollar for dollar, so it's better than a deduction.

[sj3339sta]

I'm such a tax idiot! Thanks for the info!!!!!! Since I wasn't itemizing, I wasn't going to bother even taking it in until the guy at the home improvement store yelled at me.

Is there some sort of easy cheat sheet out there for tax dummies like me so I know what credits are available?

[nancy65]

Jan 14, 2011 22:28:17 GMT -5 sj3339sta said:

I'm such a tax idiot! Thanks for the info!!!!!! Since I wasn't itemizing, I wasn't going to bother even taking it in until the guy at the home improvement store yelled at me.

Is there some sort of easy cheat sheet out there for tax dummies like me so I know what credits are available?

Sorry, there are no easy "cheat sheets." Your best bet is to just come here and ask.

[servant_of_dog]

Is there some sort of easy cheat sheet out there for tax dummies like me so I know what credits are available?

I still pick up a few Form 1040s and the instruction booklet from the library every year. By working through the form manually, with the instruction booklet, I can check whether I am eligible for various deductions. After I manually calculate all the way through the 1040, I efile, and if my final numbers match up, I know I haven't missed anything in the efile process.

I also asked a lot of questions at the "old" Tax Corner when I first started filing my own returns. I'm glad this resource is still available!