Going green is not just beneficial for the environment; it’s also a great way to boost your finances. Making energy-efficient upgrades to your home can not only reduce your energy bills but also offer some sizeable tax savings.
The Federal government wants to encourage citizens to go green, which is why they provide a range of energy tax credits.
Getting a tax credit is almost as good as not having any taxes to pay at all. Tax credits allow you to deduct sums of money from your taxes. This is better than getting a deduction because it not only reduces your taxable income it gives you a credit. For example, those in the 28% tax bracket would save $280 in taxes. However, you would need $3,571 in deductions to save $1,000 in income taxes.
Get ready for the next tax season by knowing what home improvements you can make to qualify for energy tax credits.
Home improvements are more affordable and beneficial for you if you go with ones that fall under the Non-business energy property credit and the residential energy efficient property credit. So, let’s jump in and get started.
Qualified energy efficiency improvements – Insulation, exterior windows, storm windows/doors, metal, and certain asphalt roofs
Residential energy property expenditures – electric heat pumps, central air conditioning, natural gas/propane/hot water boilers, natural gas/propane/oil furnaces, advanced main air circulating fan used in natural gas/propane/oil furnaces, and biomass fuel stoves.