With so much attention being given to the new first time home buyer tax credit, some potentially lucrative tax incentives for home improvements have been overlooked. There are some new tax incentives as well as some expansions given to the current tax credits for home improvements relating to energy efficiency and renewable energy additions like solar panels. Now I am NOT an accountant or tax professional. When it comes to your taxes, I recommend you seek the advice of an accredited tax professional. Hopefully the IRS will issue some firm guidelines on the details of these credits soon as there are bound to be a lot of questions regarding qualification.
Here are the new tax credits in a nutshell. There is a tax credit of up to $1,500 for installing qualifying windows, doors, water heaters, roofs, insulation, heating and cooling equipment (HVAC, qualifying wood and pellet stoves) to your home in 2009 and 2010. On the renewable energy side, the tax credit is 30% of the qualifying solar technology, geothermal and wind energy systems with no limit through 2016. So if you install some solar panels and a wind power generator, you will receive a 30% tax credit which lowers your tax bill dollar for dollar for the cost of the upgrade.
Notably the big increase is in the energy-efficiency tax credit, which went from 10% of the qualifying costs to 30% and the cap also goes up from $500 originally to $1,500 (that’s a total credit for all applicable improvements combined in 2009 and 2010). The credit also includes stoves that use renewable biomass fuel. Another big change with the 30% renewable energy credit is the removal of the cap on claims for systems (except for fuel cells) installed after 2008.
Under the prior guidelines the cap was $2,000 for a solar system. Now you can take 30% of the qualifying cost instead.
If you live in an older home, these tax credits are targeted at you. Just replacing your older single pane windows with new dual pane, low e vinyl replacements will have a significant impact on your utility bills. Not only will you save money, but living in your home will be more comfortable year round. Before making any decisions, I recommend you consult with your tax professional to maximize your tax benefits.
Source: Wall Street Journal
Related: First Time Home Buyer Tax Credit
Credit for Solar
I think this as awesome for promoting renewable energy and living a green lifestyle, the tax credits are a great move to cut down on some of these expenses. However, using things like portable solar chargers or solar cell phone chargers can be used to replace wall outlets, do you know if this counts as well?
Energy efficient homes
Its about time the credits were increased. Some cities have also added their own incentives usually in partnership with the local energy company. From an investment standpoint its a good long term investment too since energy costs are only going to go up. Of course, this credit is targeted at older homes, most of the new homes are already energy efficient (or should be).
Window Tinting
I would only install insulation products that certifiably qualify for the tax credit. I own a window tinting business and only certain films qualify for the tax credit. With home improvements, the safest way to not get into trouble with the IRS is to have the vendor provide you with an affidavit of certification that product qualifies under the American Recovery and Reinvestment Tax Act of 2009 (ARRA).
Window tinting is a project that enables you to take advantage of the tax credit, without an extensive remodel or other costly projects. Typically tinting a whole house will save about 30% on your cooling bill, as well as stopping the interior of your home from fading. Typical ROI on residential applications is between 2-3 years, with help of the tax credit. After payback the film is like a "Piggy Bank" in your windows.
Incidentally Solar screens are also a good insulation product (which I perform also), however, as there are no billion Dollar screen fabricators (as in the solar film industry) there is no official certification.
You probably ought to be able to claim for a solar screen project, however it is a somewhat grey area and file your taxes with solar screens at your peril.
So I heard about all the tax
So I heard about all the tax incentive programs. You would say that this is the right moment to start a remodeling project. I have a great interest in renewable energy, I am aware that this would mean long time savings but I haven't come with a project yet, I am relying on Las Vegas remodeling, they know better what are my real options.
It would behoove readers to
It would behoove readers to also check out any local utility provider programs or state credit programs as well. The City of Austin has a great Green Building Program through Austin Energy. Perdernales Electric Coop also offers some. As an EcoBroker I love these and like to help people with them.
Federal Tax Credits Save Money
It would behoove readers to also check out any local utility provider programs or state credit programs as well. The City of Austin has a great Green Building Program through Austin Energy. Perdernales Electric Coop also offers some. As an EcoBroker I love these and like to help people with them.
I agree that learning about
I agree that learning about these tax credits can make a big difference - but definitely need to talk to a tax professional to see if they are really in your best interest. It's definitely good news though for first time home buyers getting fixer uppers :)
Best Interests
I agree. You should always talk to a tax expert. These improvements will ulitimately pay for themselves over the long run. So if you can also save some money on your taxes, why not? :)
Boomers & Seniors Blog Carnival
Hi, Thanks for an interesting article and for joining us at the newest Boomers & Seniors Blog Carnival at SandwichINK - http://tinyurl.com/cudrpu . I had no clue about these great deals, so will definitely be saving this as a good resource.
Here In Utah Some great Energy incentives
Same thing here in Salt Lake City, UTAH. Because of our cold winters the gas companies have agreed to reimburse residents if they upgrade their insulation.. Wonderful improves the home, and saves you money on your gas bill.. Lots of incentives out there, you just need to capitalize on them...
What can I write off?
How do I find out what changes can be done to ones home that will qualify for a tax credit in the new stimulus package? I have installed solar screens on my home to make it more energy efficient. They do not create solar power but, block the amount of heat that comes into my home thus allowing me to run my A/C less since my home is now a noticably cooler temperature. So does my Solar Screen investment qualify for the tax credit since I am making my home more energy efficient?
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