Posted on | November 19, 2011 | 2 Comments
Home Energy Tax Credits: Save Money With Energy Efficient Appliances
Homeowners know that energy bills comprise a hefty chunk of monthly bills, and have recently been getting even higher. Add to that the responsibility many Americans feel toward being more environmentally conscious, and making more green choices becomes a clear choice. The federal government has made this an even easier option by offering a number of home energy tax credits, given to homeowners that choose to save money with energy efficient appliances.
How You’ll Save Money Using More Efficient Appliances
The biggest benefit to using high efficiency appliances in your house is that greenhouse emissions are reduced significantly. However, from a financial perspective, utilizing Energy Star or similar appliances can save you up to 30% on your monthly utility bills, even with the same usage. Your house will be more comfortable, and with replacing windows and insulation, the units that provide heating and cooling for your home will not have to work nearly as hard. You won’t have to sacrifice style or features on these greener items, as most manufacturers are making environmentally-conscious versions of the majority of their products.
What Tax Credits Are Available?
For the past several years, the government has been offering incentives to taxpayers for switching over to environmentally conscious devices. Not only will this mean money in your pocket, but will hopefully extend the lifecycle of our planet. The tax credits are available to those who own their own home, and it must be an existing house (as opposed to a new build). There may be more credits available dependent upon which state you reside in, so be sure to check your particular local government website for more details.
The amount of credit received depends on what type of appliance you’re installing in your house. The general rule is 10% of the cost of your purchase, up to $500. However, there are a number of appliances with a set dollar figure for their tax credits. Once you’ve determined what rebates or credits you qualify for, complete IRS form 5695 and submit it with your taxes. Save your receipts in the event you need to show proof of purchase.
So how much can you get for purchasing a “green” appliance? For replacing your insulation, roof, or doors, you will receive 10% of the cost, up to $500. This is often an ideal area to prioritize, as a better insulated home is a more efficient one. The home energy tax credit on windows is capped at $200, and to replace a furnace or boiler, the cap is at $150. Installing an advanced main air circulating fan, you’ll receive a $50 credit. Lastly, for any central air conditioners, air source heat pumps, water heaters, or biomass stoves, you will receive a $300 credit.
While the home energy tax credits can seem quite beneficial, it’s always best to remember to maintain low usage in the interest of reducing greenhouse gasses. Excessive usage of any utility will increase the bills, no matter how efficient.
Steve Tlapnek is a real estate investor who buys and sells homes throughout the St. Louis, MO area. For more information about Steve visit We Buy Ugly Houses Saint Louis.
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