Save $500 and the world too!

energy-credit-image.jpg

OK so that’s a bit of an exaggeration. Today on the radio I’m talking about Energy Star improvements, and while your efficient updates alone won’t end global warming, they can make a difference. With a bit of planning they will also save you $500 on your taxes, and that’s no exaggeration.

$500 is the maximum credit for improvement projects, and it’s only good for projects completed through Dec. 31, 2007.

Maximum credits for popular energy-saving projects

  • Up to 200 on windows
  • Up to 500 on doors
  • Up to 500 on roofs and insulation
  • Up to 300 on a new A/C
  • Up to 300 on water heaters

Resources

The 2007 form will not be out for awhile but it’s a fair assumption it will be similar.

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4 responses to “Save $500 and the world too!

  1. Hey there. Our mutual tax friends back in Chi-town shot me the link to this. Have to see if we can get NTO to comment…:-)

    We did actually mention the credit extention to ’08 in our Dec. write up on the ’06 Tax Act.

    In the meantime- don’t know if you have run across this blog- very cool stuff:
    http://www.earthship.net/

  2. I’m very curious as to whether this applies to improvements made to rental properties as well. My wife and I have been discussing putting TekFoil in our attic to cut down on heating and cooling costs, and the deduction would just cover the cost of doing so. Unfortunately, I’m not sure whether we’d get the tax credit or our landlord would. Sigh.

  3. Unfortunately it appears from this document http://www.irs.gov/pub/irs-drop/n-06-26.pdf that you have to own the property:

    .05 Additional Requirements. A taxpayer may claim a credit with respect to
    amounts paid or incurred for an Eligible Building Envelope Component only if the
    following additional requirements are satisfied:
    (1) The component is installed in or on a dwelling unit located in the
    United States and, at the time of installation, the dwelling unit is owned and used by the
    taxpayer as the taxpayer’s principal residence (within the meaning of § 121);

    Taxes are complicated, though, so it might be worth asking an accountant. I used to work for an accounting firm and know you always have to add that disclaimer!

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