As the year draws to a close, you might be preparing for holiday parties, but you may also be casting an eye forward to the dreaded April 15 deadline that, like death, comes for all of us. If you're nervous about how much you might owe Uncle Sam this time around, have you considered squeaking in some last-minute energy-efficient upgrades that may qualify you for a rebate or credit? If you're not quite ready to take the plunge this December, remember that many of these options will also be available next year, saving you money in 2015. (I know, it seems too early to think about 2015 taxes, but not if you're an accountant!)
As always, before you spend money on energy efficiency upgrades, make sure you know what you're getting. Talk with your contractor about what is being installed, how much energy you will save, what the options are, and how to use your new energy-efficient products most effectively. If you're performing an installation with energy tax credits in particular in mind, consult your contractor in detail to make sure everything you're doing qualifies for a credit.
Some firms specialize in these kinds of upgrades and they're very familiar with all the available credits, incentive programs, and other money-saving options. They can help you make the most money out of your decision to upgrade and they'll assist with filing documentation paperwork, claims, and other materials. You should also check with your accountant to see if there's anything special you need to consider while working for energy upgrades, as sometimes the tax code can be quite tricky for us mere mortals.
Up to $500 in tax credits
You can claim up to $500 in tax credits under the Nonbusiness Energy Property Credit. The credit applies to anything you do to improve efficiency, including trading out old appliances, installing more efficient windows, and other measures. (More details here.)
If you're a contractor, take advantage of the New Home Builder's Tax Credit of up to $2,000 on efficient new construction. And if you're working with a green contracting firm to build your dream home, talk to them about this and other tax credits available for new construction!
The Residential Energy Efficient Property Credit will help you pay for the installation of solar and wind energy products at your home. It covers up to 30 percent of the cost of qualified products, and if you aren't sure about what qualifies, check with your electrician to get more information.
You may also qualify for local rebates and incentive programs. You can use this state-by-state search to locate programs in your area and get information about what kinds of energy upgrades will be eligible.
These programs offset the initial cost of increasing the efficiency of your home and they create an added incentive to upgrade outdated equipment, energy generation systems, and more. That's a pretty good reason to ring in the new year with some solar panels, a geothermal pump, or just a new set of double-paned windows.
While you're saving energy, consider connecting with your plumber on options for saving water. Water conservation is important for your community and it'll cut down on the bills from the utility company, too.
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