Federal home energy taxes you can claim this year
Ah, going green. It' s not just a trend or a way of life; now its a matter of saving greenbacks, too. Read on to learn how you can save money with the green tax credits this year.
Roni Deutch, CEO and founder of Roni Deutch Tax Center, a national tax preparation franchise company, says to start with basics. Sure, there are federal home energy taxes you can claim this year but first make sure your green vehicle or appliances will qualify. Check www.IRS.gov to ensure that it qualifies for green tax credit. "The IRS is constantly adding and removing vehicles from the list and modifying appliances throughout the year, so be sure to check prior to purchase. Another good place to checkout is www.energystar.gov. This site gives a breakdown for each type of appliance and home improvements that qualify for credits."In particular, these home improvements may not result in immediate savings right away. "Instead, the efficiency savings are spread out over many years. So, conduct a sanity check on the investment and spend at least two to three months researching before you buy."The next step, Roni says is deducting the interest from the loan on going green home improvement projects. If you take out a loan for home improvements, including green technology improvements, you can deduct the interest on the loan with no dollar limit. "However, the work must be a capital improvement rather than ordinary repairs. For example, qualifying improvements might include adding a new roof, built-in appliances, insulation, heating/cooling systems, landscaping, or more."Specifically, if you buy a hybrid vehicle you can earn a tax break between $200 and $3,500. Installing a new roof can give you up to $500 in tax credits. For each deduction there are stipulations, however. The roof must be a metal roof which meets Energy Star requirements, the credit is 10 percent of the cost or $500 maximum and the credit is non-refundable. Installing a solar panel system or photovoltaic system will earn a deduction of thirty percent of the total cost. Cha-ching!
Energy efficient appliances will also see big returns. The credit is taken up for thirty percent of the cost which is up to $1,500 this year and 2010 for the purchase of non-solar water heaters and biomass stoves. Even installing energy efficient windows can be a tax break up to $200.Mary Canning, Dean of the Schools of Taxation and Accounting at Golden Gate University, reminds us that green tax deductions are a way to drive behavior; green consciousness is on the rise and in the long run helps our environment. "Providing tax deductions or credits that aim at the individual taxpayer encouraging decreased home water consumption, gas and electrical usage, and additional moves to green consciousness are an effective way to accelerate a strong and necessary energy conservation buy-in for the American public. Encouraging the American public to invest in "green" consumerism by way of tax favorable legislation may be what we can expect to see more of in the next several years."Howard R. Baron CPA, JD of Baron & Company, PC, explains this is ultimately a win-win situation. "For those who are energy conscience it is a valuable way to contribute to society, reduce your use (cost of energy) and get Uncle Sam to share in the cost burden."Plus, let' s not forget today' s housing market. "If you want to sell your house and your house has energy efficient property and the one down the street does not; which house will sell first?"