Doing something nice for the planet can make you feel good. Simultaneously doing something nice for your wallet can make you feel even better.save energy at home and on the road, but many of the incentives are set to expire, and it's uncertain whether Congress will extend them.
So if you're in a position to upgrade your house or your wheels, consider taking action soon.
The tax breaks include:
Energy efficiency at homeThe nonbusiness energy property credit looks pretty simple at first glance: You get a credit equal to 30% of the cost of buying certain energy-efficient products, up to a lifetime cap of $1,500. (The cap means that if you took advantage of the tax break last year and got the maximum credit, you can't get any more benefit this year. If, however, you got a tax credit of $1,000 last year, you can still qualify for $500 this year.) To get that crecit, your project(s) must be completed by the time the credit expires Dec. 31, 2010; Congress extended the credit into 2011, but homeowners can only claim $500 -- and that's a lifetime tax credit, so if you've claimed the max of $500 since the end of 2005, you can't do it again.
The products that qualify include energy-saving windows, doors, insulation, metal and asphalt roofs, water heaters, biomass stoves, and heating and cooling equipment. But here's the rub: Not every product that proclaims itself "energy-saving" or "energy-efficient" will qualify.
Luscombe, who recently had his home's roof replaced with a light-reflective version, dealt with the uncertainty by getting his contractor to write a letter testifying that the work qualified for the credit.
Another hiccup is that the cost of installation isn't always covered by the tax break. You can include installation costs for new heating and air-conditioning systems when figuring your credit, for example, but you can't include a professional installer's costs if you're putting in insulation.
Do-it-yourselfers should carefully review Energy Star's website for details on what qualifies for a break and what doesn't. Whether you hire help or not, you should ask for the manufacturer's certification statement that verifies the product qualifies for the tax credit.
To claim the credit, you'll need to submit Internal Revenue Service Form 5695 (.pdf) with the tax return that's due next April 15. Save all related receipts, the manufacturer's certification statement and any contractor certifications, in case you get audited.
You can get a different credit for installing solar energy systems, wind turbines, geothermal heat pumps and residential fuel-cell and microturbine systems. Known as the residential energy efficient property credit, the break equals 30% of the qualified costs with no cap. But you don't need to rush to claim it; the credit isn't set to expire until Dec. 31, 2016. The instructions with Form 5695 provide details.
In addition, your state may offer rebates for buying energy-efficient appliances. Many of these programs have ended, but not all.