Tax season is officially over, right? Well, not really. Even though the April 15 tax deadline has passed, you can start planning your taxes for next year right now. One way to do that is by taking advantage of tax breaks and tax credits, such as the variety of green energy tax breaks that are available.
Note: If you missed the April 15 tax deadline you can still file a federal tax extension. With an extension, your tax filing deadline with an extension is October 15th.
Green energy tax breaks and credits
Green energy tax breaks not only save you money on daily expenses, but they also save you money on your taxes. For the 2009 and 2010 tax years, you can receive up to a 30 percent tax credit for the first $5,000 spent on upgrades and improvements to your home’s energy efficiency. Some eligible upgrades include new windows, doors, air conditioners and furnaces, insulation, solar energy, and more.
Combine these federal tax credits with available state tax credits, manufacturer’s rebates and rebates and discounts from appliance centers and home improvement centers and you’ll save even more on your purchases. You can’t go wrong with green tax breaks – in fact, many of them will pay for themselves over time.
Tax savings for new windows. Whether sealing out winter’s icy blast, or sealing in your air conditioning, you’ll be saving smartly with these upgrades. Resealing windows can lower your monthly utility bill significantly, as well as helping you on the road to greater energy savings. The tax credits offering savings for such actions help to significantly reduce the excessive cost of energy, saving you hard earned money.
Tax credits for appliances. This program was also known as the “cash for appliances” program, which was similar to the “Cash for Clunkers” program. The main difference was that you did not have to turn in an old appliance to receive the tax benefit; simply buy a new, energy efficient appliance. Tax credit savings can also include up to $50 on a refrigerator and other rebates on different appliances. See a list of available state tax credits.
$50 may not sound like a lot of money, but savings add up quickly. Earning a 30 percent credit (that’s $1,500) on the first $5,000 you spend in making your home more energy efficient can help add up the savings really fast.
Up to a $500 rebate for central air conditioning. Receiving a tax credit up to $500 is a great savings, especially if you are replacing an inefficient system. Add that to a factory rebate offer or store discount and you may well double your saving before you ever spend a dime. Purchases like these are great for earning the green energy tax break savings and offer consumers the incentive to continue making his home more energy efficient.
Solar hot water system tax credits. If you live in a warm climate, you may well consider a solar hot water system. Solar hot water systems are definitely a green energy system. These systems cost upwards from $6,000 to $10,000, depending on the type of system you’re installing, but with a 30 percent tax credit, you’ll quickly see the savings advantages of such a purchase. This is a quick payback investment, especially if you’re going to be replacing your electric hot water system anyway. This particular tax credit is available through 2016 and can be claimed against the alternative minimum tax (AMT), an added tax that some folks in higher income brackets have to pay above their regular income tax.
Solar energy tax credits. Another great value for a green energy tax break is a solar energy system. Again with a 30 percent tax credit, a $60,000 system will shave $18,000 off your taxes. An added advantage is that you can carry forward any unused credits to your future tax years. This credit is also available through 2016 and can also be used to offset the AMT.
Public transportation tax credits. If you live in a city with a bus system, taking the bus is another green energy tax break. If your employer offers it, you can set aside up to $230 per month for public transportation costs on a pre-tax basis. When you consider the fuel for your vehicle, the maintenance costs, parking and wear and tear on your vehicle in stop and go traffic, taking the bus or alternate transportation makes more sense in many ways.
Other green energy tax credits. Other tax credits may be available for geothermal heating, commuting via bicycle, hybrid car tax credits, wind energy, and more.
Save your money before you even spend it by taking advantage of these great green energy tax breaks. Whether it’s home improvements, or transportation to and from work, it’s well worth the effort—for you, and the environment.