Surviving the changing tax laws and regulations can be a significant struggle. Each year laws are changing and sometimes it can seem like you always grab the short straw.
But there are some consistent opportunities which have been set in place for home owners who want to do their part to live GREEN.
If you choose to make property improvements with Energy Star Rated Products and Processes you are eligible for tax credit equal to 30% of the total cost of the improvement! This tax credit can be applied to products like, new windows, new heating or cooling systems, solar panels, wind fans and geothermal heat pumps.
Not only will these products qualify you for a tax credit but they will significantly lower your energy costs over time. If, for example, a new furnace and AC system cost $3,000 to install but you were able to get an ultra-high-efficiency furnace and AC for $4,000 you would qualify for a tax credit of $1,200 AND your energy savings could be significant!
Another scenario to think about... If you have an out dated heating/cooling that is still working, but you could install a new furnace and AC for $4,000 (taking advantage of the tax credit) your total cost for the improvement would be $2,800. But, this improvement also saves you $50/month on energy costs. You would make up that cost in energy savings in less than 5 years, increase your homes resale value, and lower buyer objections during the listing process. From my perspective, this large up grade could work to your favor by thousands of dollars!
As an extra bonus, your house is heated in a more consistent and predictable way, increasing your comfort and you are able to do your part to live GREEN!
If you don't use an accountant you may wonder how to file for these energy upgrade savings on your taxes.
The process is simple IRS Form 5695 will help you make the calculations and these figures can be added to your 1040 and file just like any other credit/deductible item.
If you want to learn more about going GREEN, contact the SMART Team and get a referral to an expert in energy improvements, taxes, or any other area you may need.