What are the rules to claim 2006 tax write off for new windows for State (CO) and Fed.2006 taxes?

Question

Do you have to pay in-full in 2006 or the windowsor how does that work? Need as much detail as possible

Answer 1

Anytime you want to deduct something from your taxable income, it has to be money you have actually paid, so in short, it does have to be paid in full. However, if you use our credit card to pay for it, it is considered to have been paid in full.

There is a similar credit expected for 2007, so I wouldn't worry too much about that part of it. The credit (for 06) is 10% of the cost, and is further limited to $500 for all tax years. And no more than $200 of that can be attribuatble to windows.

There is a seperate credit for people who put in solar panels - a 30% credit with a $2000 maximum credit.

It is important to remember that these are credits, which means they reduce your tax, but may not be refundable - it's not like you automatically get your money back, a common misconception.

Let me know if you need anything more. I've attached the IRS release on this ruling.

Answer 2

Are you replacing broken windows or just old ones? If broken how did they break? Replacing old windows increases your tax basis in the house but is not a deduction on you return. If you are replacing broken windows, it depends on if you qualify for a 'casualty loss'. If you do the first $100.00 is still not deductible. Assuming a casualty loss, you can take the deduction in the year of the loss. There are even rule that may allow you the amend your return for the year before the loss to accelerate your refund.