Winter is approaching, energy costs are high, and you’re thinking about conservation. Don’t forget that cutting your energy use can cut your tax bill, too. Make the right energy-saving improvements and you can earn tax credits. These directly offset the taxes you owe. But remember, most credits are available only for 2006 and 2007.
Here are some of the ways you can earn credits.
- Improve the efficiency of your home’s “envelope.” This means adding insulation or new doors, windows, skylights, and even some types of metal roof. Generally, credits are equal to ten percent of your costs, but caps apply to individual categories.
- Install a new furnace, hot water heater, or heat pump. In theory, credits are available for up to 100% of the cost, but caps apply to each item. There’s an overall limit of $500 for all residential credits for 2006 and 2007 combined.
- Invest in new energy technology for your home if you want even bigger credits — up to $2,000. This includes items such as fuel cells, solar water heaters, or a “photovoltaic” system for producing electricity.
- Buy a qualifying hybrid car and earn a tax credit of up to $3,400, depending on the model. Credits are available through 2010, but are beginning to phase out for the more popular models.
- If you’re a contractor, build an energy-efficient home and earn a credit of up to $2,000.
Call our office before you start your energy conservation projects. We can provide details that will help you to maximize your tax savings. Questions for our Financial Expert?
E-Mail us at: finance@ClevelandSeniors.Com
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