In the current wake of drought, the dire predictions of global warming, and the ever-expanding population, the talk of energy efficiency is becoming more prevalent. There are no immediate answers yet, however what we do know is that many of our appliances, our vehicles, etc. directly contribute to green house gas emissions. Newer appliances, however, are being built to perform to higher standards of energy efficiency.
Everything from washers and dryers, water heaters, kitchen appliances, etc. each year seem to supersede the appliances that came before. To install new appliances throughout the home, however, is expensive, although it will help to lower the cost of a homeowner’s energy bills. The government offers the Residential Energy Efficient Property Tax Credit, and the Nonbusiness Energy Property Tax Credit.
Residential Energy Efficient Tax Credit
The Residential Energy Efficient Property Tax Credit involves modifications to one’s home that are considered energy efficient. These updates include the use of solar, wind, geothermal, and, in some cases, fuel-cell technology. To qualify for the upgrades, upgrades need to be in direct use with the home. The electricity generated from solar power should be responsible for powering the home. The credit to be issued at tax time is the equivalent of 30% of the cost of the improvement—this includes the cost of installation, which for items like solar panels can be quite costly.
Nonbusiness Energy Property Tax Credit
This is where some of your appliance purchases, etc. can qualify for tax credits. This could include everything from new home insulation to a new electric water heater. However, there are qualification requirements for the appliances. While these are not often advertised by companies, you may call the companies themselves and ask if they are participating, and, if so, with which models. The recouped costs of the tax credit is 10%, or, if you have already participated in this tax credit, $500 for all the years combined.
Practical Taxes is a full service accounting firm in Billings, Montana. We can help you get the most from your taxes, and make sure that you will get the maximum refund every year. But we don’t just do taxes! We can help with your bookkeeping, payroll, bank reconciliation, budgeting, and more. Give us a call at 406-894-2090 to learn more.