Energy Efficiency Reminders From Your Tax Preparer
Did your tax preparer fill you in on tax credit opportunities for installing energy efficient systems in your home?
You can get that information from your local tax preparer.
Electric and gas bills can be quite challenging to a budget. If you have made improvements to your home, they may qualify as a credit on your taxes. The federal government implemented this credit to reward homeowners who make the change to more energy efficient systems.
In order to qualify for the credits, the energy saving service must be installed in your home by December 31 of 2016. Services included in this credit are:
*Geothermal Heat Pumps - These pumps use natural energy from the Earth to provide heat, air conditioning and hot water to your home. The technology involved is efficient and state of the art.
*Small Wind Turbines - Kinetic energy is collected from the wind and the turbine converts it to electricity to be used in the home.
*Solar Water Heaters - A collector and storage tank uses thermal energy from the sun to heat your hot water.
*Solar Panels - Solar cells capture the sun's light energy and convert it into electricity for your home.
*Fuel Cells - A cleaner alternative to gasoline combustion. Check with your tax specialist to understand the limit with this particular energy saving option.
States have similar tax credits for using energy efficient systems in your home. You may also save on your state taxes as well. Find more information about what your state offers.
These systems are an investment for your home. Once the system is in place, the energy savings will begin to pay back the initial costs. If your household is one with large energy costs, one of these systems may be the best investment you make for your home.
The tax deduction available to homeowners who make the changes is an additional bonus to the year round savings.
Because the initial investment may take some time to manage, it would help you to understand what programs are offered as deductions within your residing state as well as which one will provide you with the largest percentage of efficient energy savings. These energy saving systems must be installed on the primary residence of the person requesting the credit.
The property must also be located in the United States. If you are going to apply for the credit on your own, you must use IRS Form 5695. By using this Form, you will not have to itemize these deductions on the Schedule A Form to qualify for the deduction.
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