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Take Advantage of Two Home Energy Tax Credits for Homeowners

Two home energy tax credits for homeowners have been expanded starting in 2009.  The non-business energy property tax credit is equal to 30% of up to $1,500 of a homeowner’s expenses on eligible energy-saving improvements.  The $1,500 limit is for the combined 2009 and 2010 tax years.  High-efficiency heating and air conditioning system, water heaters and stoves that burn biomass, and the labor costs associated with the installation of these systems qualify.  Energy-efficient windows, skylights, and doors, qualifying insulation and certain roofs also qualify, but the cost of installation for these items does not.

Under the Residential energy efficient property credit, electric systems, solar hot water heaters, geothermal heat pumps, wind turbines and fuel cells qualify for up to 30% of what a homeowner spends on them.  Generally, this can also include labor costs.  There is no cap other than on fuel cell property.  This credit runs from 2009 through 2016.

Points of Interest

  • Quite simply, retirement account contributions can be attributed to the previous tax year as long as the contributions are made before April 15 of the following year.
  • The traditional IRA can be set up by an individual at a bank.
  • As blanket advice, it is best to maximize your tax return by investing in your future and your retirement.

By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors