Now is the time to improve the energy features of your house.  During 2009/2010, you can recoup your investment by:

    * lowering your energy bills; and
    * saving up to $1,500 on your tax bill.

The American Recovery and Reinvestment Act of 2009 allows tax credits for energy efficiency improvements. Homeowners may claim up to 30% of costs of all equipment purchased during the aggregate two-year period of 2009 and 2010, up to $1,500 total.

Tax credits for installations made in 2006 and 2007 are still limited to the previous law’s $500. Any purchase made in 2008 is not eligible for this tax credit. 

Eligible Improvements 
Owners of existing homes receive a tax credit worth 30% of the cost of upgrading the efficiency of their home. The following improvements are eligible for the tax credit:

    * Insulation materials and system
    * Exterior doors and windows (including skylights)
    * Roofs (metal and asphalt)
    * Electric heat pumps
    * Central air conditioners
    * Natural gas, propane or oil water heaters
    * Natural gas, propane or oil furnace or hot water boilers
    * Electric heat pump water heaters

Performance and quality standards for tax credit eligibility vary by technology. See the Energy Star web site for detailed information on qualifying products.  Click here for complete details on the Residential Energy Efficiency Tax Credit (Source: DSIRE)

What is a Tax Credit?
There is an important difference between a tax credit and a tax deduction. A tax credit is subtracted directly from the total tax liability. On the other hand, a tax deduction is subtracted from income before total tax liability is computed. This means that a credit is much more advantageous to the taxpayer than a deduction.

Therefore, it’s an excellent time for homeowners, buyers and sellers to get an audit and make energy efficiency improvements to their homes.

Post courtesy of Kevin Richardson
Richardson Home Inspections
www.richnspect.com