Generous tax credits resulting from
energy-saving purchases are still available to taxpayers, even after the
so-called fiscal cliff legislation passed earlier this year.
On the low end of the spectrum, homeowners can
receive a tax credit equal to 10% of the cost to upgrade their windows, doors,
and other energy efficient household items. On a grander scale, you can receive
a credit for major purchases such as air conditioners, furnaces, biomass
stoves, and special metal roofs. The maximum lifetime credit is generally $500,
but some items are capped at a lower amount. For instance, windows are maxed
out at $200 and furnaces at $150. Air conditioners limit out at $300.
Businesses can also get in the energy tax
credit game. Some of the tax perks available include credits for constructing
wind, biofuel, or ethanol facilities, as well special vehicle refueling
stations and highly efficient appliances. The IRS’s qualifications for these
big-ticket items are very specific, so you would be smart to consult a tax
professional before launching such a project.
But large-scale energy upgrades aren’t limited
to just businesses. Individuals can receive a credit of 30% of the cost to
upgrade their home with a qualified geothermal heat pump, solar electricity
generator, or wind harnessing device. Eligible costs can include labor and site
preparation in addition to the equipment. What’s more, the credit for these
types of projects is available for vacation homes too. And there is no lifetime
limit, so the bigger project, the bigger the saving. Again, check all the rules
to qualify.
Recordkeeping plays an important role in
claiming these tax credits, so be sure to obtain all manufacturer
certifications for the equipment you buy and keep all records of expenditures
made. If an energy-saving project is on your mind, contact our office for the
latest rules.
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