Earth Day tax breaks

Happy Earth Day!

To encourage us to be more environmentally friendly not just on April 22, but on every other day of the year, Uncle Sam offers several tax breaks.

Home
As noted in my earlier post on Missouri's energy-efficient appliances sales tax holiday, you can claim a tax credit on the federal level for certain home improvements.

The American Recovery
and Reinvestment Act (AKA the Obama stimulus) which became law on Feb.
17 offers taxpayers a credit of up to $1,500 for some energy-efficient
home improvements.

Under the federal
credit, which can be claimed on 2009 returns filed
next year, eligible improvements include such residential upgrades as
air conditioners, furnaces, storm windows and doors, insulation and even window film, as
long as the products meet Energy Star standards.

The table on page four of this story, 7 housing laws you don't want to miss, offers an overview of some of the new federal home energy tax credit. Additional info, and a longer table, can be found at EnergyStar.gov.

Auto
Gasoline prices are still relatively low, but I suspect they'll creep up as the summer vacation driving season nears. That might get some folks thinking about buying a new energy efficient auto.

Some hybrids still offer decent tax credits. The tax break for Ford hybrids has begun phasing out, but if you're a dedicated GM fan and believe the automaker will survive, the full credits are still available for its eligible hybrid vehicles.

The IRS has put together a table listing 2009 model year hybrids and their credit amounts. You can find prior model years and credits at this IRS page.

Charity
Contributions to charitable organizations generally are deductible as long as you itemize. Give to an IRS-qualified group that supports environmental causes and you get the two-fer of supporting a good eco-cause and reducing your tax bill on next year's return.

Locally, I'm a fan of the Lady Bird Johnson Wildflower Center. But there are lots of worthwhile environmental causes out there. Check out IRS Publication 78 to find one that meets the tax agency's standards and your philanthropic inclinations.