Another way to save some cash this coming year is to remember to go green when updating around your home.
It doesn't seem that long ago when being environmentally friendly - or "green" as it's now called - was a crusade dominated by the Birkenstock-wearing, poetry-reading vegetarian-types. "Save the Whales" campaigns and "tree-hugging" were not really associated with monetary gain. In fact, it seemed quite the opposite.
My, have times changed.
In case you haven't noticed, "going green" seems to have an even greener tinge to it lately, as in the color of money. Green cars cost more. Green houses cost more. Organic, earth-friendly foods cost more. In many instances, we consumers pay a little more green to go green.
The good news is, homeowners lately have had an opportunity to cash in themselves a little bit on the green movement.
True, we've always had options that make our homes more environmentally friendly while helping our wallets, too. We turn the thermostat down in the winter and up in the summer. We turn lights off when we leave rooms, and we take shorter showers to conserve water.
In 2009, however, taxpayers had available to them a $1,500 home energy tax credit. This credit, which will also be around in 2010, gives you a tax break if you make certain qualified home improvements. These include.
- Energy-efficient windows
- Energy-efficient heating and cooling systems
- Energy-efficient hot water tank
- Attic insulation
- Wall insulation
- Sealing air leaks
- Wood fueled heat
The government will pay - in the form of a tax credit - the first 30 percent of your cost to go green on any of these projects, up to $1,500. The credit does not cover labor, however, on every project.
The credit earned to insulate or seal air leaks, for example, can only include the price of the necessary materials. Installation IS covered on some major projects, such as solar and wind power installations and geothermal heat.
Households are eligible for up to $1,500 on all such projects completed in 2009 and 2010. For example, if you spent $1,000 on new, properly certified windows in 2009 - you're eligible for a $300 credit. Any projects you complete next year, then, would be limited to a maximum of $1,200 in tax credit.
Remember that credits, unlike deductions, are dollar-for-dollar reductions in tax liability.
Consumer Reports magazine advises that you keep any Manufacturer Certification Statement as well as itemized bills and all receipts associated with each project.
To claim your credit, you must use IRS form 5695 when you file your return. For more information on these credits, visit www.IRS.gov.
You can also check out www.Energystar.gov for more information on the tax savings available for going green. Click on the "Tax Credits for Energy Efficiency" link.
You should also check the Energystar site for word on appliance rebates, for which information is expected to be available before the end of the year.
Remember, for these two years at least, going green can help you earn some green not just on your monthly energy bills, but on your tax bill as well.
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