Green Tax Guide: Make Your Home Energy Efficient and Save Taxes Too
If you paid for home improvements to make your home more energy efficient in 2007, you may be eligible for tax breaks as well. Federal Tax Credits are available for home improvements that include installing energy efficient windows and doors, roofing, insulation, central air conditioning, water heaters, solar energy systems and fuel cells.
Tax credits are subtracted from the amount of tax due, which can be a lot more valuable than a tax deduction. A tax deduciton is subtracted from the amount of income earned and then you must pay whatever taxes are due on that income at your current tax rate.
Tax Credits can total up to $500 for home improvements, but if you add a solar energy system or fuel cells the tax credit can be a lot higher. For solar energy systems you can write off up to 30% of the cost up to $2,000. For fuel cells the tax credit can be as high as 30% of costs paid up to $1,000. To get these credits you'll need to file Form 5695 with your tax return. In this series I focus on what you must do to qualify for these tax credits.
You may find that your state also offers additional tax incentives. Go to the Database of State Incentives for Renewables and Efficiency and click on your state to find the incentives available to you.
Congress is trying to extend these credits for 2008, but legislation has not yet passed that includes the extension, so watch the news. You may be able to have similar write offs for work done in 2008 if the legislation does pass.
Does Humane Veal Exist?
Eco-Friendly Halloween Costumes
Ed Begley, Jr. Talks to GreenDaily About Going Green for Cheap
