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Last year, as part of the economic stimulus bill, Congress passed upgraded tax credits for those who make green home improvements in 2009 and 2010. If you made green home improvements in 2009, there is still time to claim a credit on your income tax return. If you haven’t made green home improvements, but are thinking of going green and making your home a little more earth friendly, this is the year to do it, so that you can claim a credit next year on your 2010 taxes. A tax credit is desirable because it directly lowers what you owe. It’s kind of like taking a gift card and using it to reduce your total.
Not only will you get a tax credit when you make certain green home improvements, but you can save on your monthly heating and cooling bills as well. And you can have the happy feeling of knowing that you are helping the environment.
Start with an Energy Audit
The first thing you should do is conduct an energy audit of your home. You need to know where the trouble spots are so that you can fix them more effectively. You can do the energy audit yourself, you can pay someone to come in and perform the audit for you. Either way, the goal is to look for energy leaks. These can include your windows, ducts, doors and a lack of good insulation. Additionally, old water heaters and furnaces can decrease the efficiency of your home. Once you have your energy audit complete, figure out which changes would be most effective for you, based on your financial situation, what you can afford, and the tax credit you can get.
Tax Credits for Small Upgrades
Most of us can’t just put in a solar panel system. However, you can take advantage of the tax credits with some less expensive green home improvements. When you make certain changes, you can get a tax credit worth 30% of the cost, up to $1,500. Some of the upgrades eligible for this tax credit include:
- Replacement windows.
- High efficiency heating system.
- High efficiency cooling system.
- Highly-rated insulation.
- Duct seals.
- Energy efficient doors.
- Water heater.
With just these small changes, it is possible to make your home much more energy efficient.
Big Green Home Improvements
If you have been thinking of installing solar panels, a geothermal pump or a wind turbine, this might be a good year to do it. This is because you can get a tax credit worth 30% of the cost — and there’s no cap on how much you can get. So if you spend $20,000 on installing an alternative energy system, you will get a $6,000 tax credit. That’s not too shabby. If you install your new system right, you will also find that you can enjoy lower power costs, since you won’t need to buy as much from the grid. Combine such a system with measures to make your home more energy efficient, and you’d be surprised how much you can save.
Of course, if you do install an alternative energy power system, it will probably take years for it to pay for itself. However, the tax credit is still useful, since it offsets the cost of these systems. In some cases, you can get home improvement loans to help you pay for energy upgrades, allowing you to deduct the interest you pay. Another option to help you pay for energy efficiency upgrades to your home is to check with your city and with your state for special grants, state tax breaks and low-interest (or even interest-free) loans.
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Go green all the way and learn how to grow your own organic food garden. Home gardening is the future.
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This post was mentioned on Digg by drmangrum: So spend $20,000 to earn $6,000 tax credit that might earn you an extra couple hundred dollars on your tax return. You then have to keep the home for another 20 or 30 years to reach a break even point. Sorr…
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