Tax breaks for energy efficient home improvement purchases are set to expire in 2010, leaving taxpayers with just enough time to take advantage and save money.
This year is a good time to make green home improvements. This is because — unless Congress extends the tax breaks again — the advantages offered by green home improvements will be disappearing. 2010 is the year they expire, so if you want to get an advantage for upgrading your home with green improvements, now is the time to do it.
Available Tax Breaks Related to Home Improvement
You can get a tax credit for 30% of the cost of making small upgrades to your home, up to $1,500. This is a credit that will reduce the amount of money you owe on your 2010 tax return (to be filed in 2011), kind of like a gift card. These small upgrades include the following:
High efficiency heating and cooling systems.
Better insulation.
Energy efficient windows.
Energy efficient doors.
New water heater.
Duct seals.
These are simple upgrades that can be done for a relatively low cost. You will make your home more energy efficient, saving money in heating and cooling costs as well as helping to save the environment. You can get an energy audit to get a better idea of problems areas, and figure out exactly what you might do.
In addition to these small things, you can get a bigger tax credit for big green home improvements. The tax credit for installing a solar panel system, geothermal system, or wind power system is 30% of the cost, with no cap. So it doesn’t matter how much you spend; you will still get a tax credit worth 30% of the cost, including installation costs.
State and Local Help with Green Home Improvements
Check your state and local governments for additional incentives. My parents were able to replace all of their windows with an interest free loan from their city. Their payments are automatically added to the power bill, and they will have the windows paid off in three years — without paying interest or loan fees. They already saved close to $250 in heating costs this past winter. My gas company is offering a partial rebate if we install more insulation in our home.
Many states have their own tax advantages, grants and special programs that can help you get even more back, on top of what the federal government is offering. Check into all of your options and make a plan for green home improvements. And, don’t forget that if you refinance or get a home improvement loan to cover the costs of green home improvements, that interest might be tax deductible. So if you’ve been planning to participate in being a little greener to save yourself some green, now is the time to go for it.
Source: www.banks.com.
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