I’m sure we are all now well aware of the economic crisis that our country is in; stock markets prices plummeting, job layoffs at an all time high, bailouts for financial institutions, and home foreclosures at an all time high, while home values plummet to an all time low. It has become commonplace to watch the nightly news and hear about the billions of dollars that the government is shelling out to aid massive corporations, and be left to wonder what they are doing to help us, the little guys. President elect Obama has already mentioned another incentive check, similar to the one we all received earlier this year, but until that is approved, another angle to look at is tax breaks.
One new area to look at come tax time is the how we spend our money on energy, and ways we can not only save some much needed pennies, but receive tax breaks in the progress. The government recently passed the Emergency Energy Stabilization Act, and contained within it are a number of ways the average consumer can get a little relief come tax time.
Home Energy Efficiency Improvement Tax Credits
Starting January 1, 2009, consumers can claim tax credits on home improvements that will result in increasing the energy efficiency of their home. Included in the list are exterior windows, including skylights and storm windows, exterior doors, storm doors, metal and asphalt roofs, insulation, and the upgrading of HVAC systems to meet Energy Star requirements. Almost all of these items will get you a tax credit of 10% of the cost, not including installation, up to $500. On top of the tax credits, you should also find that you will make a significant savings on your monthly energy bills, a nice double whammy.
Residential Renewable Energy Tax Credits
There has been a lot of talk in recent years about trying to limit the use of traditional energy usage, and making a switch to renewable, green friendly, energy sources. Consumers who choose to install solar energy panels will now receive a 30% tax credit if they install between now and December 31, 2016. The previous $2000 cap on the credit has been scrapped. Also included in this group are small wind systems (up to $4000), and geothermal heat pumps (up to $2000). Again, the impact on your monthly bills using any of these new sources will be staggering.
Automobile Tax Credits
Anyone who has been thinking of switching to a hybrid vehicle should probably do so now. It may be wise to do a little homework though, as the tax credit in this category depends on a number of factors. Fuel economy, vehicle weight, and gasoline consumption are just a few of the items that will be used to determine the amount of the tax credit. If you are able to find a vehicle that maximizes your tax credit, it may be wise to double up, especially if you have a small business, as this credit applies to both individuals and businesses.
It’s tough to say, given the financial outlay required to make these upgrades, just how much you can hope to get back come April 15th, but long term we will all win as converting to new energy sources will create a host of new jobs in the green collar market as well as improving the world we all live in.