Ahhh February, we are now in the second full month of winter and many people in the northern states and elsewhere are starting to feel run down from a lack of sunshine. If you are starting to feel this way may we suggest that you ...
In case you missed it – January happens to be National Radon Month. Radon (Rn) is a chemical element found on the periodic chart, with an atomic number of 86 found all over the world. Radon is a naturally occurring, radioactive, colorless, and tasteless gas ...
In the last few weeks, it sure has been interesting – here in Alabama we would go from freezing temps in the morning with highs in the 70’s later that day. In Denver, they had the opposite issue when they went from T-Shirt weather in ...
UPDATE - this was originally written in 2011 - for 2012 taxes are due on the 17th, and then we go back to the 15th for the next three plus years... Oh no, it’s April 16th and taxes were due… on the 18th? In reality, ...
Air can easily leak in and out of a home through cracks, joints between different materials, where holes have been drilled to allow pipes and wire to enter the structure, and many other openings. Some of the popular areas for air leakage is around doors, ...
In our last article, “Energy Efficiency vs. Conservation – what is the real issue?” we covered plenty of the issues that involve your actual house while it is being worked on. While we have also had several articles on making your house more energy efficient, ...
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In case you missed it; October is National Energy Awareness Month & a quick primer on the Energy Tax Credit
Ok, I admit it, I had no clue and this is its 22nd year of it being observed. Obviously though I am not the only one, as one site that lists all the different “National Fill in the Blank Month’s” has over 30 listings just for October and not one of them is about energy. Ok, maybe the Auto Battery Safety Month deals somewhat with an energy source, but that is as close as we get. I think we may have a slight failure on the government’s part here on getting the message out. Speaking of failing to get the message out, how about that $1500 tax credit for Energy Efficient upgrades? Most every homeowner I talk to has not heard about it or even if they have heard about it, they do not fully understand how it works. Please note: we at SLS Construction are not lawyers, accountants, or tax professionals and we strongly recommend you contact one of them if you have specific tax or legal questions.
What is a credit?
First, the $1500 energy tax credit is part of the ARRA of 2009. If a homeowner makes certain eligible energy efficient upgrades to their main residence during the 2009 and 2010 years, they can qualify to get a credit on their taxes. A tax credit is pretty cool as it counts as money paid in and reduces the amount you owe unlike a deduction, which only lowers your taxable income. A quick example – let us say you make $40,000 this year; your federal tax owed would be $6,188. A deduction of $1500 would save you only $375 ($5813 still owed), while a credit would drop what you owe down to $4688.
Here is a nice little item for those of you that file married but filing separate – you can actually double the credit. (i.e. one claims the roof, while the other claims the AC Unit upgrades)
What’s the catch?
That sounds great, but what are these “eligible” upgrades and what’s the catch? Well let’s break this up and deal with the eligible upgrades in the next section. The first catch is that even if you purchase multiple products you can only get a maximum of $1,500 over the entire 2-year period. If you get the entire $1,500 credit in 2009, then you cannot get anything additional in 2010. The second catch is installation costs are not included in some popular upgrades like window replacement or adding installation. Another catch is that you must fill out a special tax form and will need to get and keep a “Manufacturers Certificate” in case you are audited. The final catch is that it only covers 30% of the cost – so to get the full $1500 you have to have invested a minimum of $5000 to perform the upgrades.
A quick reference chart of eligible upgrades
Item
Qualified Products
Labor Inc?
For More Info
Insulation
You need to bring area up to 2009 IECC standards — insulated vinyl siding does not count
Do Not Forget – all items require a Manufacturers Certificate that it meets the Tax Credit Standard in case of an audit
So is it for me, and any suggestions?
As for the first question, that is only a question you can answer. If you were planning on upgrading your AC, redoing your roof, etc… in the next few years, it may be worth it to push it up. If you want the most bang for your buck, get an energy audit done – it doesn’t make much sense to replace your windows if your AC unit is 20 years old, or all that nice cool air goes straight out your attic.
But wait, there’s more…
For additional tax credits related to Geo Thermal, Biomass, Solar, Wind, & Fuel Cells; EnergyStar Website
For additional information on policies, programs, or incentives offered by your local utility, local government, state government, or federal government that promote renewable energy and energy efficiency click here & choose your state; http://www.dsireusa.org/
For Business, Public Utilities, and Manufacturers there are some other tax breaks available also; http://www.energy.gov/additionaltaxbreaks.htm
In case you missed it; October is National Energy Awareness Month & a quick primer on the Energy Tax Credit
Ok, I admit it, I had no clue and this is its 22nd year of it being observed. Obviously though I am not the only one, as one site that lists all the different “National Fill in the Blank Month’s” has over 30 listings just for October and not one of them is about energy. Ok, maybe the Auto Battery Safety Month deals somewhat with an energy source, but that is as close as we get. I think we may have a slight failure on the government’s part here on getting the message out. Speaking of failing to get the message out, how about that $1500 tax credit for Energy Efficient upgrades? Most every homeowner I talk to has not heard about it or even if they have heard about it, they do not fully understand how it works. Please note: we at SLS Construction are not lawyers, accountants, or tax professionals and we strongly recommend you contact one of them if you have specific tax or legal questions.
What is a credit?
First, the $1500 energy tax credit is part of the ARRA of 2009. If a homeowner makes certain eligible energy efficient upgrades to their main residence during the 2009 and 2010 years, they can qualify to get a credit on their taxes. A tax credit is pretty cool as it counts as money paid in and reduces the amount you owe unlike a deduction, which only lowers your taxable income. A quick example – let us say you make $40,000 this year; your federal tax owed would be $6,188. A deduction of $1500 would save you only $375 ($5813 still owed), while a credit would drop what you owe down to $4688.
Here is a nice little item for those of you that file married but filing separate – you can actually double the credit. (i.e. one claims the roof, while the other claims the AC Unit upgrades)
What’s the catch?
That sounds great, but what are these “eligible” upgrades and what’s the catch? Well let’s break this up and deal with the eligible upgrades in the next section. The first catch is that even if you purchase multiple products you can only get a maximum of $1,500 over the entire 2-year period. If you get the entire $1,500 credit in 2009, then you cannot get anything additional in 2010. The second catch is installation costs are not included in some popular upgrades like window replacement or adding installation. Another catch is that you must fill out a special tax form and will need to get and keep a “Manufacturers Certificate” in case you are audited. The final catch is that it only covers 30% of the cost – so to get the full $1500 you have to have invested a minimum of $5000 to perform the upgrades.
A quick reference chart of eligible upgrades
Do Not Forget – all items require a Manufacturers Certificate that it meets the Tax Credit Standard in case of an audit
So is it for me, and any suggestions?
As for the first question, that is only a question you can answer. If you were planning on upgrading your AC, redoing your roof, etc… in the next few years, it may be worth it to push it up. If you want the most bang for your buck, get an energy audit done – it doesn’t make much sense to replace your windows if your AC unit is 20 years old, or all that nice cool air goes straight out your attic.
But wait, there’s more…
For additional tax credits related to Geo Thermal, Biomass, Solar, Wind, & Fuel Cells; EnergyStar Website
For additional information on policies, programs, or incentives offered by your local utility, local government, state government, or federal government that promote renewable energy and energy efficiency click here & choose your state; http://www.dsireusa.org/
For Business, Public Utilities, and Manufacturers there are some other tax breaks available also; http://www.energy.gov/additionaltaxbreaks.htm