Energy Improvement Tax Credits
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, 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.
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
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