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Posts Tagged ‘tax credits’

Enjoy Tax Credits For Energy Conservation

February 15th, 2010 by Matthew C. Keegan | 2 Comments | Filed in Consumer Tips

Who knew that conserving energy in the home can be so very beneficial financially?

If you made a purchase in 2009 or are planning to make one in 2010 of an energy-efficient product or renewable energy system for your home, you may be eligible for a federal tax credit. Related purchases made last year can be claimed on your 2009 federal tax return while related work completed this year can be claimed for 2010.

Stimulus Funds

Energy StarThe U.S. Department of Energy is behind many of the tax credits, some of which were put in place when that massive $787 billion stimulus package was passed in 2009.

The maximum tax credit you can receive is 30 percent or $1500 which can be realized by purchasing $5000 in eligible products through December 31, 2010. That is a cumulative amount too; you cannot claim $1500 in both years.

What sort of energy saving products qualify for the tax credit? Quite a few including:

Biomass Stoves: 30% of cost, up to $1,500 For 2009 and 2010 only; and for primary residences and existing homes only.

HVAC: 30% of cost, up to $1,500 For 2009 and 2010 only; and for primary residences and existing homes only.

Insulation: 30% of cost, up to $1,500 For 2009 and 2010 only; and for primary residences and existing homes only.

Roofing: 30% of cost, up to $1,500 For 2009 and 2010 only; and for primary residences and existing homes only.

Non-solar Water Heaters: 30% of cost, up to $1,500 For 2009 and 2010 only; and for primary residences and existing homes only.

Windows and Doors: 30% of cost, up to $1,500 For 2009 and 2010 only; and for primary residences and existing homes only.

There are several tax credits that have been put in place through 2016, some of which have no upper limit:

Geothermal Heat Pump: 30% of cost, with no upper limit. Must be “placed in service” by Dec. 31, 2016. For primary residences, however vacation homes eligible for partial credit; no rentals. For both new and existing homes

Solar Energy Systems: 30% of cost, with no upper limit. Must be “placed in service” by Dec. 31, 2016. For primary residences, however vacation homes eligible for partial credit; no rentals. For both new and existing homes

Wind Energy Systems: 30% of cost, with no upper limit. Must be “placed in service” by Dec. 31, 2016. For primary residences, however vacation homes eligible for partial credit; no rentals. For both new and existing homes.

Fuel Cells: 30% of cost, up to $500 per .5 kW of power capacity. Must be “placed in service” by Dec. 31, 2016. For primary residence; new and existing homes.

Lastly, there are certain tax credits for people who buy energy efficient passenger vehicles including battery electric, hybrid, and certain diesel models. Visit fueleconomy.gov for details.


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Fed Tax Credit, Rebates For Select Home Improvement Projects

April 28th, 2009 by Matthew C. Keegan | 3 Comments | Filed in Home Improvement

If you’re planning a home improvement project for this year or next, you may want to take a look at the legislation that President Barack H. Obama signed into law on February 17, 2009. That bill, known as the American Recovery and Reinvestment Tax Act of 2009, is a $787 billion stimulus/pork initiative that includes some important benefits for homeowners.

Energy StarIn particular, if you are looking to replace windows, doors and skylights on your home, you could receive a significant rebate on your federal taxes.

The new bill actually modifies the tax credits for windows, doors and skylights established in the Energy Policy Act of 2005, which was signed into law by President George W. Bush on August 8, 2005, containing the following provisions according to the Energy Star program which is part of the U.S. Environmental Protection Agency:

  • To qualify for the tax credit, windows, doors, and skylights placed in service after February 17, 2009 must have a U-factor and Solar Heat Gain Coefficient (SHGC) less than or equal to 0.30. You can find the U-factor and SHGC on the National Fenestration Rating Council (NFRC) label. See an example of the NFRC label. NFRC is the only federally recognized organization for determining the energy performance of windows, doors and skylights. Please see the NFRC website for information concerning product performance.
  • Qualifying products purchased between February 17, 2009 and December 31, 2010 are eligible for a tax credit equal to 30 percent of the product cost. The maximum amount of homeowner credit for all improvements combined (including roofing, insulation, HVAC, and water heaters) is $1,500 during 2009 and 2010.
  • For products purchased between January 1, 2009 and February 16, 2009, the terms of the tax credit are less clear. The Internal Revenue Service will likely clarify these terms in guidance documents, which are expected to be released later this year.

Definitely, the new law adds hundreds of billions of dollars to the US debt, something that the American taxpayer must consider when pursuing this type of tax rebate. Still, with the money on the table, many homeowners will likely consider what amounts to be a huge tax incentive, giving them as much as $1500 back on their qualified home improvement project.

Source: Energy Star

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Buy A Hybrid Now Or Wait For Government Incentive To Kick In?

September 25th, 2008 by Matthew C. Keegan | 6 Comments | Filed in Autos Express
The Chevrolet Volt will likely garner an IRS tax credit of $7500 for buyers when the car comes to the market in late 2010. Most hybrid models receive some sort of federal government credit, an allowance buyers should take into consideration when selecting a new car.

The Chevrolet Volt will likely garner an IRS tax credit of $7500 for buyers when the car comes to the market in late 2010. Most hybrid models receive some sort of federal government credit, an allowance buyers should take into consideration when selecting a new car.

Federal Intervention To Help You Buy The “Right” Car

Never underestimate the federal government’s desire to steer consumers to purchase much more fuel efficient cars and get away from buying gas guzzling trucks and SUVs.

For the past several years, buyers of hybrid vehicles — those cars designed to run on either gas or electric power — has helped some consumers make the switch. As it stands right now most hybrids carry a price premium of $2500 to more than $10000 over the cost of a comparable gas-only powered car, making them only worth it for people who drive a lot. But, with an IRS tax credit of $250 to $3000 on select models, that differential is reduced, making hybrids a logical choice for more and more drivers.

Some Vehicles Qualify, While Others Do Not

Not every car qualifies for the tax credit as the IRS has created a formula which determines how much credit a car will get, if any. Some Toyota Prius owners have found themselves to be ineligible to receive a tax credit because the IRS phases credits out when a particular model sells more than 60,000 units in a year. The Prius is a popular car, but the US government doesn’t want to give industry leader Toyota too much help in this area.

Under consideration right now is a new legislative package which will offer even greater incentives to a new type of hybrid vehicle expected to become available by 2010. Plug-in hybrids, cars which can get the bulk of their energy from the electrical grid, are currently in the pre-production stage, most notably the Chevrolet Volt, a car with a range of 40 miles on electric power only. These cars will also be equipped with small gasoline engines to help extend their range, but the bulk of the people who will be buying plug-in hybrids will be commuters, particularly those whose commute falls within that 40 mile round trip range.

A Handsome IRS Tax Credit Coming

The federal package zipped through the Senate earlier this week, approved by a 93-2 margin. The house will be taking up the legislation shortly and is expected to pass the bill. President Bush is expected to sign the measure into law, paving the way for what will be a generous IRS tax credit.

Under the proposed legislation, plug-in hybrid owners will receive a significantly larger credit thanks to their vehicle’s ability to store more electricity than conventional hybrid vehicles. That credit will range from $2500-$7500, which will come in handy as the chief vehicle it was designed for, the Chevrolet Volt, will retail for about $40,000, some $15,000 more than a Toyota Prius. The price differential is due in part to GM using a lithium-ion battery to power the Volt while the Prius uses older technology, a nickel-cadmium battery.

Buy Now Or Wait?

For consumers wanting to save money on their next car purchase, the temptation to wait ’til 2010 looms large, especially if other incentives packages to buy a plug-in hybrid are announced. Some large corporations have talked about offering incentives to employees to purchase cars like the Chevrolet Volt including providing free recharging stations which could recharge employees cars while they work. This would be an attractive option for the person who lives beyond the Volt’s electric range, effectively allowing them to tap into the power grid while at work and again once they return home at night. Some states, including California, are studying additional incentives which will help ease the financial burden owners.

But, waiting until 2010 may not be right for every buyer, particularly for the motorist who needs a new car before that time. Fortunately, Honda will shake the market up again when its new Insight hybrid is released, a car with a proposed base sticker price of $18,500, not including IRS tax credit.

Regardless of what decision you make when buying your next car, hybrid vehicles are looming larger than ever before. Standard hybrids offer fuel economy numbers from 20 to 60 mpg, while plug-in hybrids push that figure up to the 150 to 250 mpg range. Clearly, reducing your pain at the pump is an excellent reason to consider hybrid powered vehicles and beginning in 2010, that picture suddenly brightens considerably.


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