Folks can get free money from Uncle Sam for investing in home energy savings projects. It isn’t cash in hand money, but tax credits are work just like money on April 15th.
If you buy new energy saving doors, windows or insulation you can get a tax credit of 30% of the cost of the materials. You cannot get a tax credit for the cost of installing. The credit is for the purchase of the materials only.
Here is a partial list of item that you can invest in to get the tax credit:
· Storm Doors
· Replacement exterior doors
· Replacement windows
· Storm Windows
· Biomass stoves
· Whole house fans
· Solar water heaters
· Solar cell systems
· Home wind turbines
· High efficiency furnaces
· Heat pumps
· High efficiency central air conditioning
About Tax Credits
A tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed. Consumers can itemize purchases on their federal income tax form, which will lower the total amount of tax they owe the government.
Check this government web site for more information.
Tax Credits for Windows, Doors, and Skylights
On February 17, President Obama signed into law the American Recovery and Reinvestment Tax Act of 2009. This bill extends and modifies the tax credits for windows, doors, and skylights established in the Energy Policy Act of 2005. The following guidance is not intended as legal advice, and you should consult a tax professional with specific questions.
Qualifying products purchased between January 1, 2009 and December 31, 2010 are eligible for a tax credit equal to 30 percent of the product cost. Installation is not included; be sure to obtain an itemized invoice from your retailer or installer. The maximum amount of homeowner credit for all improvements combined (including roofing, insulation, HVAC, and water heaters) is $1,500 during 2009 and 2010.
Documentation hoops you need to jump through
You need a receipt that shows the cost of the materials. The material cost must be separate from the cost of installing the items purchased. The date you bought the items needs to be legible.
For major items, you also need to document the date of installation in order to meet all the requirements.
Homeowners must obtain a manufacturer certification statement to document window, door, or skylight eligibility for the tax credit. If the retailer or installer cannot provide this document, it may be available on the manufacturer's Web site.
Here is a link to a good article from Ohio Edison that helped me know more about these tax credits.
The program also includes big-ticket items like high efficiency furnaces, heat pumps, and biomass fuel heating equipment. The tax credit for some big-ticket items is not capped at $1,500.
I suggest you get quotes and manufacturer certification statements first. With that information in hand, then get advice from your tax professional, before you spend your money.
The tax credit boosts the return on your investment. It is like getting paid to do things to cut your energy bills that you should do anyway.
Click here for a free money saving report written by the Energy Boomer titled HOW SAVE MONEY ON YOUR NEXT HEATING BILL