Energy Bills Got Ya’ Down! – Get Even with Energy Improvement Tax Credits
Any Tax Credits for me, a current
homeowner?
If you are impacted by the cold wave or saw
your air conditioning bill skyrocket last year, now is a good time to think
Efficiency.
Recently there has been a
lot in the news about the tax credit for first-time homebuyers, (Resources HERE
)but don't think there is nothing for existing homeowners. Many sources have
told consumers not to stop thinking "energy conservation" now that the price of
oil is moderating. It's a great time to make energy efficient improvements in
their homes.
For a complete list of Energy related credits such as new heat pumps and
Hybrid cars etc, Click on Energy Related Tax
Credits, in the ENERGY CONSERVATION section in the Library
below.
In last year's stimulus package the government provided for a 10% tax credit
of the cost of new windows, doors, roofing, insulation, furnaces,
air-conditioning systems and heat pumps. The old rules had a lifetime maximum of
$500 total credit.
TAX
Credits For New Insulation From: Houselogic.com
TAX
Credits For New Heating and Cooling Systems From: Houselogic.com
Many in the remodeling industry thought the meager 10% credit was not enough
reason to undertake major renovations and they were right. There was no
discernible increase in improvement activity tied to the tax credit.
CREDIT vs DEDUCTION As you may know, a tax credit lowers
your total tax due dollar for dollar. If you owe the IRS $500 and have a $200
credit, that $500 gets lowered to $300. A tax deduction, however means you can
reduce the amount of taxable income that you owe taxes on. The real benefit is
seen after your apply your tax bracket. Most times when you figure it out, a Credit is better than a Deduction.
ENTER 2010: In order to both increase economic
activity (remodeling) and expand energy efficiency, the new stimulus package
raises the tax credit to 30% of the cost. It also tripled the lifetime maximum
to $1,500. It is retroactive from Jan 1, of last year and expires at the end of
2010.
For specific information on new Windows and Doors click HERE
Complete Resources here on Energy.gov
The new provisions also apply to newly added
systems such as solar-energy panels, water heaters and geothermal heat
pumps.
A lot of what is included in the above actions are
considered "Energy Star" approved. You can get a better picture of what is and
is not covered at
http://www.energystar.gov/index.cfm?c=products.pr_tax_credits