How's your first day of Summer 2010 going? If this longest day of the year is already too sweltering, here's a tax tip that could make it more comfortable, from both temperature and financial perspectives.
Connie, our first contestant in the ol' blog's Midyear Tax Moves contest, reminds us that the $1,500 tax credit for home-energy improvements is still available for this tax year.
It could be extended — you never know with Congress — but just in case, if your A/C system is on its last legs and just not doing the job efficiently, let Uncle Sam help you replace it.
This tax break had it's origins in the 2005 energy bill, but back then the tax credit was much smaller and more complicated. In 2009, though, as part of the American Recovery and Reinvestment Act, improving your home's energy level got easier and more tax beneficial.
Now qualified residential energy efficient improvements will get you a tax credit of up to 30 percent of those costs, maxing out at $1,500.
Note, however, that this credit was available last tax year, too. So if you claimed the maximum tax credit on your 2009 return, you don't get additional tax breaks for 2010 upgrades.
On the other hand, if claimed just a portion of the credit or didn't claim any energy tax credit at all on your 2009 return, you can claim the balance for the 2010 tax year to get to the $1,500 limit.
Upgrades that count include adding insulation, energy efficient exterior windows and energy-efficient heating and air conditioning systems.
More complex, and expensive, energy operations, such as assorted solar, wind and geothermal systems, also offer a credit of 30 percent. In these cases, there is no dollar cap. And for your home energy upgrade planning purposes, these types of improvements are tax credit eligible through 2016.
Get more details from Form 5695 (instructions are on pages 3 through 5), as well as the Energy Star website.
More midyear tax tips on their way: Thanks again Connie for pointing out available energy tax savings as part of our inaugural Midyear Tax Moves infofest and contest.
If you have a tax move we can make now to help reduce our upcoming 2010 tax bill, we'd love to hear from you. I'll be posting the tips, one a day until we run out.
If you're succinct, I'll take your tip via Twitter @taxtweet. Got a bit more to say, post it on the ol' blog's Facebook page.
And if you want a chance to win a New Yorker desk diary, check out the details here (the entry deadline has been extended to June 27).
Related
posts:
- Improve your home
- Energy Star rebates aren't federal income
- Go green with your tax receipts
- The race is on for energy efficiency
- Bicycling tax break injustice?
- Michigan tax tidbit: energy credits
- Arizona tax tidbit: solar energy credit
- Show Me sales tax savings
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