Three Things You Need to Know About Home Improvements to Help Slash Energy Bills and 2010 Taxes
- Simple qualifying improvements include increasing insulation or insulating items such as door and windows, roofing, skylights, etc. These qualify for aÂ 30 percent creditÂ on the cost of the item, not installation,Â Â up toÂ a maximum credit cap of $1,500.Â
- Certain big-ticket items haveÂ no maximum credit cap. The credit is still 30 percent of the cost of the item. These items include furnace, air conditioning, tankless water heater, heat pump, geothermal system, solar or wind installation.Â
- Itâ€™s a taxÂ credit, not a deduction.Â That means it reduces the actual taxes you owe, not your taxable income.Â Use IRS Form 5695, and hang onto receipts and product labels.
Donâ€™t forget toÂ checkÂ your state and local area for additional incentives.
For more info on the federal tax credit, check out:Â EnergyStar.govÂ andÂ NAHB.org/efficiencytaxcredit.