Thursday, March 12, 2015

Going Green Can Save You Green

by Ryan VanArsdale

Tax time can be very stressful. Gathering all of your documents and receipts, filling out forms, wondering if you remembered everything, and then holding your breath waiting for your refund, or sweating it out while you try to figure out how to pay what you owe.

While there are many deductions and credits to be had by taxpayers, some of the easiest can be found by improving on their biggest investment – their home.  More and more emphasis is being put on energy conservation, both in commercial and residential buildings, so the government offers tax incentives to homeowners for “Going Green”. The following is a list of just a few of the items that can save you green by going green!
  • Certain roofing products (metal or asphalt with pigmented coatings or cooling granules to reduce heat gain)
  • Advanced main air circulating fans
  • Insulation
  • Exterior Doors, windows or skylights
  • Water heaters (including solar-powered)
  • Heat pumps, central air conditioners or furnaces
  • Solar Panels
  • Biomass Stoves

Another place to look for savings is in installation of some of the items listed above. Installation qualifies for coverage for:
  • Biomass Stoves
  • HVAC
  • Non-solar water heaters
But not for:
  • Roofs
  • Insulation
  • Skylights, windows and exterior doors

To take advantage of these credits, you need to fill out Form 5695 (instructions for filling out the form can be found here). Be aware that the tax credit for nonbusiness energy property is restricted to improvements to and appliances installed at a primary residence. Rental home, second home, or vacation home improvements do not qualify for these credits. Also, make sure to save your receipts and invoices, in case the IRS requires proof of purchase and installation.

Many of the qualified improvements, such as exterior doors, roofing, windows and skylights must meet the ENERGY STAR® guidelines.  More information on what qualifies for ENERGY STAR tax credits can be found at the ENERGY STAR® website. Boilers and Furnaces must meet 95 AFUE to qualify for the energy tax credit. AFUE stands for Annual Fuel Utilization Efficiency, and is a representation of the average efficiency of the unit. ENERGY STAR® lists key product criteria here.

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