Make energy efficient updates to your home and apply for tax credits by December 31
Tax Day next April is a long way off, but the deadline to take advantage of a valuable tax credit – worth up to $500 – is December 31, 2013.
Taxpayers can save more green by going green and making energy efficiency improvements to their homes before New Year’s Day in the form of a new roof, water heater, furnace, boiler, heat pump, central air conditioner, building insulation or exterior windows and doors that qualify. These upgrades allow you to claim a Non-business Energy Property Credit of 10 percent of the cost, up to a maximum credit of $500.
More ambitious homeowners who add solar hot water heaters, solar electric equipment, wind turbines and geothermal heat pumps to their abodes before 2017 can earn a Residential Energy Efficient Property Credit, with a maximum of 30 percent of the qualifying cost.
“Using these credits is a wise financial move because it allows a homeowner to reduce his income tax liability directly on a dollar-for-dollar basis,” says Dana Lime, product manager with NerdWallet, a personal finance website based in San Francisco.
To use either tax credit, the improvements made must be to your primary residence located in the U.S., and each manufacturer must provide a certificate verifying that its product qualifies.
However, not all energy efficiency improvements qualify, actual construction costs cannot be claimed for the credit, and you’re ineligible if you’ve claimed $500 or more in energy efficiency credits in previous years.
Homeowners shouldn’t make these energy efficiency updates solely for the credits, though, says Larry Rosenblum, director for the Boca Raton, Fla., office of CBIZ MHM, a national accounting firm. “But if you’re already planning on making improvements to your house, it’s something that shouldn’t be overlooked, as these additions can help you save on energy costs in the house.”
For full details on eligibility, restrictions and how to file, visit tinyurl.com/lb7c32x. — Erik J. Martin
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