Tax Breaks for Home Improvements

You might be able to write off some of the cost of installing energy-efficient windows or other fixtures.

Kimberly Lankford's avatar
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Can I still get a tax credit for installing energy-efficient windows?

You still can take a tax break for installing energy-efficient windows, but you need to act quickly: The windows must be installed by December 31, 2007, to qualify for the credit.

You can get tax breaks for a variety of home improvements. You can take a tax credit for 10% of the cost, up to $500, for installing energy-efficient windows, doors, skylights, insulation and a metal roof coated with heat-reducing pigments (only $200 of the credit can be for replacement windows). You can receive a credit for installing certain efficient hot water heaters and central air conditioning systems, too.

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For more information about which home improvements qualify for the tax break, see EnergyTaxIncentives.org and IRS Form 5695, which you'll need to submit when you file your taxes.

Also see Your Energy Crisis Solved for more ideas about saving energy on your home.

Kimberly Lankford
Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.