As the year is coming to an end, you are may be looking for ways to lower your energy bills. There are many solutions for you; the U.S. offers many tax credits for energy-saving home improvements. Unfortunately, you will need to act fast, some expire on December 31st.
What improvements are covered by the expiring credits?
Homeowners can get a tax credit for installing:
• Specific wood or pellet stoves
• Energy-efficient furnaces
• Water heaters and air-conditioning systems
• Insulated roofs, windows and doors
• Wall and ceiling insulation.
The tax credit covers 30% of the purchase costs, up to $1,500. For a complete list, check the Energy Star website at www.energystar.gov.
Is the installation cost covered?
The cost of putting in heating and air-conditioning systems, water heaters and biomass stoves is covered. Unfortunately, installing new windows, doors, roofs and insulation is not covered.
Can I use the tax credits for improvements in a vacation home?
The improvements qualify for an existing home that is your primary residence, even if it is a houseboat or mobile home. But rentals, vacation homes and new construction are not eligible.
With time short, what improvements make the most sense?
Upgrading your heating and cooling can save as much as 50% of the average home's energy bill. If your furnace or boiler is more than 10 years old, this may be the ideal time to replace it.
What improvements can be done relatively cheaply?
Adding insulation is the cheapest choice for home renovation. The most low cost choice is to just insulate the area where your family spends most of their waking hours. The cost will be low and your family will be much more comfortable. Also insulation is a do-it-yourself project, meaning you can save on labor costs.
Am I going to have trouble finding a contractor on short notice?
In the current recession, many contractors will be available. You can find qualified contractors at the website of the National Association of the Remodeling Industry at, www.nari.org. Many of the contractors have knowledge of the tax cuts and have the equipment and materials ready.
Will a new dishwasher get me some tax credits?
Unfortunately, appliances do not qualify, but appliances carrying the Energy Star seal will help reduce your energy bill. Many states and local utilities are offering direct rebates on some appliances. To check if programs are available in your state go to www.energysavers.gov.
Might the program be reinstated for future tax years?
Legislation has been introduced to extend the tax credits, but experts have said it is unlikely that Congress will pass it before the end of the year.
Will I be able to handle this on my tax return without having to call on an expert?
The form is simple. You will need to save the manufacturer's certificate that states the equipment or service is eligible under the program. If not available with the product, the certificates can also be found on the websites of the manufacturers.
Are there any tax incentives for rooftop solar-power systems?
Federal tax credits for solar-energy, small residential wind turbines and geothermal pump systems cover 30% of all costs, installation included, with no cost limit. Also, these apply to primary homes, vacation homes and new construction. The best part is that these do not expire until 2016.