Welcome to the Tax Insights Podcast, where we break down complex tax topics into bite-sized how-tos. In this episode of Tax Insights Podcast, Jeff Dvorachek explores homeowner tax credits for upgrades, uncovering IRS benefits for energy-efficient improvements like windows, doors, and AC units.
Today on Tax Insights, Jeff dives into the realm of tax credits for homeowners looking to upgrade their properties. Tune in as he explores the benefits offered by the IRS for energy-efficient upgrades. From windows and doors to air conditioning units, discover how these tax credits can ease the financial burden of enhancing your home’s efficiency.
Host: Today on the program, let’s talk about tax credits for homeowners that may put in new windows, potentially new doors or air conditioning units, a lot of things like that.
Jeff: Yeah, so Terry, we’ve been hearing a lot in the news that housing prices are going up and there’s just less houses to find out there. A lot of people, I think, are just staying in their old home and keeping it up as much as they can. For those people that want to put improvements into their existing house, the IRS, as of the beginning of last year, January of 23, increased the credits for doing some of those home improvement projects.
Host: Okay, so what are some of those credits and or some of the things that people could look out for? I mean, obviously we said windows or air conditioning units. What else is there?
Jeff: Yeah. Those are the big things. The big things are, as long as you put in some kind of energy-efficient improvement. Those things are, like you said, doors, windows. You can do a home energy audit. You can even do furnaces, air conditioners, and things like that. Those kind of things will qualify for credit. The credit that the IRS gives you is, if you do, let’s say you do doors. Your credit could be up to $250 per door or $500 total.
Host: Wow.
Jeff: So they’ll pay for 500 bucks of your doors. That’s not a bad deal.
Host: Absolutely.
Jeff: For windows, it’s like a $600 credit. If you get one of these home energy audits to see how you can save energy, the IRS will pay for $150 of that one. Now, what the credit really is, is it’s 30% of whatever you spend.
Host: Gotcha.
Jeff: So, in other words, if you want a $500 credit for the doors, let’s do the math here real quick on that, Terry. You spend about $1,600, $1,700 on doors. You’ll end up getting a $500 credit.
Host: I love it. And again, this is good information for homeowners to know, especially as they start to look at their current house and figure, okay, how do we… How do we make some of these improvements, realize, and hey, if you invest the money in some of these things, you’re going to get some of that money back through these tax credits.
Jeff: Right. And for windows and doors and things like that, it’s really… You don’t have to put the absolute best ones in. Now, obviously, they have to be energy-efficient, but you don’t have to put the best ones in.
Host: And that brings up a good point that there are some certain requirements on these items for you to get these tax credits, correct?
Jeff: It is. So, they definitely have to be certified as energy-efficient. Now, if you’re looking at things like your air conditioners or your furnaces, now that kind of has to be kind of that next level up of efficiency. It can’t just be your standard air conditioner. It’s got to be a better one than just standard to get those credits. So you really wanna talk to the person that you’re buying it from and the person that’s installing it just to see if these particular windows, doors, air conditioners, furnaces — If the one you’re buying, actually qualifies.
Host: Yeah. Makes sense. Jeff, a lot of great information here on the program. Tax Insights each and every week here on WOMT. If our listeners would like to connect with the team over at Hawkins Ash here, Manitowoc, where do they go?
Jeff: I would go right to our website, HawkinsAsh.CPA. Go to that CPA HQ section and you’ll find a lot of good information there.
