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Tax Breaks for Homeowners
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Author:  BagBoy [ Mon Nov 02, 2009 8:49 pm ]
Post subject:  Tax Breaks for Homeowners
disclaimer: I'm no accountant or tax expert, this is just what I've recently learned/been told.

I had some windows that really needed to be replaced, so I finally did it last week. There are usually good federal tax incentives for home improvements that meet certain energy efficiency standards, but they are better than ever right now. If you've got beneficial home improvements you've been putting off, you should really consider doing it soon.

Right now the current federal tax incentives for home improvements can get you up to a $1500 tax credit. That's not a write off of income, but an actual tax credit meaning they will give you up to $1500. These incentives last through 2010, and the $1500 max is a total for both tax years combined.

So in my case the windows came out to $320 each and the tax credit is 30% of that. Technically, I'm only supposed to claim that 30% on the windows themselves, not the labor. Gee, I hope I don't forget that before April 15th! If I don't forget, that's still a tax credit of $75 per window, based on labor being 20%. Certain HVAC systems and water heaters are eligible, also, and I plan on jumping on that, too.

It's no bailout, but DC is going to end up paying me (and hopefully you, too) $1500 to do stuff that I REALLY should have done before now, and that stuff is going to reduce my energy bills signifigantly. It's a win-win.
Author:  Squanto [ Mon Nov 02, 2009 9:04 pm ]
Post subject:  Re: Tax Breaks for Homeowners
There's tons of stuff for energy efficiency purchases. I've been looking into the ones for a furnace myself, only because I have to replace my furnace that has a cracked heat exchanger and is now dead.

Keep in mind that a bunch of these may not be refundable credits. What does that mean? If these credits bring you down "below" $0 owed, you don't get the difference.

Quick (SIMPLIFIED!!!) examples:

Assume you have $300 in non-refundable tax credits coming.

Let's say you owe $500 in taxes once everything is calculated.You have $300 in tax credits coming, so now you owe $200.

However, let's say you only owe $200. You have $300 in tax credits coming, so now you owe $0, BUT you don't get that extra $100 back as a refund.

Non-refundable tax credits are sometimes referred to 'wasted' credits, because some of the credit might be 'wasted' if it takes you below $0. The deduction for contributions to a personal retirement account (IRAs) is an example of this.

Refundable credits are like the First Time Homebuyer's credit. You get anything left over as a refund when they're done.

If you look into a furnace or heater, talk to your utility company, and see if they offer any credits. Up here, National Grid and National Fuel are providing refunds for certain energy efficient furnaces and water heaters (as well as thermostats) as part of other programs. YMMV of course, but worth looking into.
Author:  icehound [ Mon Nov 02, 2009 9:22 pm ]
Post subject:  Re: Tax Breaks for Homeowners
There are credits available on the county, state AND federal levels...Not to mention the equity added.
Author:  mechaphil [ Mon Nov 02, 2009 9:26 pm ]
Post subject:  Re: Tax Breaks for Homeowners
Not only are there furnace related credits in addition to the window credits, there are also credits for tankless water heaters, the oft-preferred Energy Star appliances, and this nifty device that goes under your bathroom sink - it filters out all the crap you rinse down the drain, and uses the remaining water for your toilet, saving you a ton of water a year.
Author:  Squanto [ Mon Nov 02, 2009 9:31 pm ]
Post subject:  Re: Tax Breaks for Homeowners
Indeed. Frankly, I was all about buying energy efficient stuff when I moved in here anyways. Had an apartment once with the $300 gas bills, didn't want to do that again. :)

Already have an Energy Star fridge, and Energy Star washer and dryer. Didn't go top of the line, but I got decent stuff, and the energy efficiencies are going to pay off long term.

My new furnace will be 95% AFUE, and I'm most likely going to get a woodburning fireplace insert too. I love having a fireplace, but it's not built very well, and doesn't push much heat into the house. The insert lets me burn wood, but has blowers to move that heat out into the rest of the living space. I considered a pellet insert, but the insert would have been almost as expensive as the furnace once it was all said and done. Might put one in the basement once I refinish that though.

Man...I feel like such a hippie.... :p

EDIT : Tankless water heater was on my list. Would have had it in by now if it wasn't for the furnace going.
Author:  ItsMe [ Mon Nov 02, 2009 10:23 pm ]
Post subject:  Re: Tax Breaks for Homeowners
I have a pellet stove in my garden room. The room is well insulated. The problem is with the pellets. This year, a bag of pellets is about 5 bucks. In cold weather a bag last 24 hours and all it does is supplements the furnace a bit. At an averge pellet bill of 800 a year, it isnt worth it as my gas bill only rose 500 without the pellet stove.
Author:  SchonyGal [ Mon Nov 02, 2009 11:47 pm ]
Post subject:  Re: Tax Breaks for Homeowners
Is having my house sided considered energy efficient and deemed worthy of a write-off? I'm pretty sure I had it sided in February. I remember posting a pic in the old WPOD forums depicting a wind storm that ripped my insulation board off leaving a shape resembling Texas :lol:
Author:  Crosscheck [ Mon Nov 02, 2009 11:54 pm ]
Post subject:  Re: Tax Breaks for Homeowners
Does anyone else find it sad that we talk excitedly about getting tax credits/breaks?

Hooray, I get to keep a bit of my cash that was otherwise going to be involuntarily confiscated!

/Carry on, the thought just struck me and I had to post
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