Individuals and businesses can reap serious tax savings for making the switch to renewable energy. Making the switch to go green is a smart investment in the future, and with the write tax plan, it can be an investment that starts paying off today. Be sure to keep all of your receipts, and keep an eye out for some of these tax deductions.
One big green incentive for homeowners is the tax credit for renewable home energy systems. This tax credit allows you to deduct 30 percent of the cost of installing solar electric and water heating systems, with no upper limit. New construction and existing homes qualify for the credit, but it must be your primary residence. While the cost of putting in a solar system can run in the five-figures, this tax credit can put a nice chunk of that change back in your pocket.
And speaking of green technology, you can take advantage of a Department of Energy credit if you purchased an all-electric vehicle in the past year. Tax credits are based on the vehicle’s battery capacity and range from $2,500 to $7,500.
Your appliances may also be your ticket your savings. The Energy Star program, in place since the oil embargo of the 1970s, rewards energy efficient washers, dryers, dishwashers, ovens, refrigerators and other appliances that put less strain on the power grid. Not all Energy Star appliances qualify for a deduction, but you can check the Energy Star website to see if yours is eligible.
When looking to get the most savings on your energy efficient upgrades, you’ll want to make sure your financial house is in order. Typically these sorts of tax credits aren’t enough to raise a red flag for an audit, particularly if you are a homeowner who hasn’t taken advantage of them in the past. Nevertheless, you’ll need to itemize each deduction you take and provide proof of each claim. Working with an accountant or Turbo Tax will put you on the right foot to get your tax return properly filed with the most amount of green energy deductions allowed.
You’ve made the smart decision to move away from fossil fuels by upgrading your home’s energy system. Now reward yourself with a few extra tax return dollars in your wallet.
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