Wednesday, December 16, 2009

Homeowners Save Energy, Cash with Tax Breaks

So your car isn't a clunker? And you're not buying a new home? (But maybe you should be!) But maybe your air-conditioning unit is on the fritz. Or your small business needs new equipment or office furniture. Perhaps you have always wanted solar panels. Then there is a tax break waiting for you. Although there hasn't been much hype surrounding these credits and deductions-all increased or expanded by federal stimulus bills passed this year and last year-retailers say sales of new, energy-efficient products are beating expectations in the midst of the recession. Federal stimulus laws allow homeowners to get a tax credit of 30% of the cost of energy efficient windows, doors, water heaters, air conditioners and furnaces, up to a maximum of $1500. So, if you max out your credit on your new A/C, you can't use it for one of the other items. But if you don't use any or all of the credit this tax year, you can buy a qualifying item and claim the credit or any remaining credit in 2010, said Amy McAnarney, an executive director at H&R Block's Tax Institute. The items have to be installed by Dec 31, 2010, for taxpayers to claim the credit. Get a copy of the manufacturer's statement to make sure your item qualifies for the tax credit.

Another tax credit allows homeowners to get up to 30% of the cost of solar energy systems, such as solar water heating and solar power, small wind systems and geothermal heat pumps if they are installed by Dec 31, 2016. It's separate from the credit for windows, doors and A/C units so homeowners can use both. There is no cap on the solar credit.

Information courtesy of RISMedia -

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