Home improvements could earn energy efficiency tax credits
If you are considering home improvements to improve energy efficiency during the winter months, you could earn a tax credit at the same time. A tax credit is subtracted from the amount of taxes an individual owes so it could add up to big savings.
Here’s what you should know about the Residential Energy Efficient Property Credit.
The tax credit is 30 percent of the cost of alternative energy equipment installed on or in your home.
Several purchases qualify including solar electric systems, solar water heaters, fuel cell property (limited to $500 for each one-half kilowatt of capacity), small wind energy property and geothermal heat pumps.
The credit is available for property placed in service through Dec. 31, 2016.
If the credit is more than the tax you owe, you can carry forward the unused portion to next year’s tax return.
For more information on the standards used to qualify products as “energy-efficient,” visit wws.irs.gov or www.energystar.gov.
Energy-savings steps taken this year could add up to tax savings next year!