Saving Tax Money While Saving Money
The 2012 tax season is upon us and many are preparing to take advantage of available tax credits for energy efficient home upgrades and other green purchases over the last year. While these are somewhat complicated and have specific requirements, they are a great way to save on your taxes. Just make sure to do your research and consult a tax expert to see which tax credits you qualify for.
Existing Home Retrofit Tax Credit (25C)
The Existing Home Retrofit Tax Credit that was set to expire in 2011 has been reinstated as of January 1st 2013. This allows homeowners up to a $500 tax credit, for qualified improvements, retroactive back to January 1st, 2012. It is important to note though that there is a lifetime cap on this tax credit of $500. So if you have used it in the past, make sure that you have not reached the cap.
New Energy Efficient Home Tax Credit (45L)
For new homes, the New Energy Efficient Home Tax Credit (45L) has also been reinstated as of January 1st, 2013. It is retroactively renewed though 2012 and extended through the end of 2013. Builders and developers are eligible to receive a $2,000 tax credit for the construction and sale of homes that achieve a 50% improvement in energy efficiency over the 2006 International Energy Conservation Code (IECC).
Make sure to do your homework though. The qualifying standards were updated when the credit was renewed.
Residential Energy Efficient Property (25D)
Another big energy-efficiency housing tax credit is the Residential Energy Efficient Property 25D credit. This allows homeowners tax credits for installing solar panels, geothermal heat pumps, small wind turbines and even fuel cells. The credit is allowed to be used with existing homes and new construction.
There are also incentives with in the Residential Energy Efficient Property (25D) for investment properties as well.
Plug-In Electric Vehicles For Business (30D)
The electric car may not be mainstream yet, but they are making progress, and if your business has purchased one since 2009, you may qualify for a tax credit.
According to Internal Revenue Code Section 30D, a credit is provided for “Qualified Plug-in Electric Drive Motor Vehicles” including passenger vehicles and light trucks. This can be a credit of $2500 to $7500 depending on the vehicle. To see which vehicles qualify, see the manufacturers list here.
State Tax Credits and Other Savings
Another great resource for finding ways to take advantage of tax credits and rebates is DSIREUSA.org. Simply click on your state and see what is available.
Consult A Tax Professional and The I.R.S.
The tax code can be very confusing and finding out if you qualify for these and other tax credits is a challenge. But in the end, it could amount to quite a bit of money so it is worth looking into. The I.R.S. website and your local tax professional are your best bet when sorting through the red tape.
Also, make sure to take a look at your HomeNav Dashboard where there are additional resources that connect you with Federal, state and even local tax incentives for your home and business. April is just around the corner!