Energy efficient home improvements made to your primary residence could reduce your tax liability thanks to an extension of a federal tax credit program.
Let's say you have an HVAC system that is giving up ghost. If you get a qualifying efficient unit installed this year, the feds will pay part of the cost up to $300 in credits when you do your taxes in 2012. Or did you put in new energy-saving windows earlier this year? The feds will pay you $200 next year. (The money that's available caps out a maximum of $500.)
Of course, the benefit of energy efficient stuff, forget about the credit, is that over time you will save so much money on your energy bill.
What kind of paperwork will you need to have on hand when it comes time to claim your tax credit? USA TODAY advises that, "The contractor or manufacturer should be able to provide a statement certifying that the product or component qualifies for the tax credit. You don't have to submit this with your tax return, but should keep it with your tax records, along with your receipt for the purchase."
Certain appliances aren't eligible for the credit. The ones that aren't on the list include refrigerators, washer-dryers, ovens, ceiling fans, room air conditioners and light fixtures.
Meanwhile, should you find yourself shopping for a new appliance, I want to give you a few pointers:
- When it comes to dishwashers, you can buy an ultra-efficient model for around $250. With today's modern dishwashers, there's no need to pre-rinse the dishes. Give it a try and see if I'm not right!
- Don't use too much detergent when using your washing machine. If you have an HE washer and you buy HE detergent, you'll see the label says to use only a tiny bit. Try it. It works! Cold water works too. So try washing those clothes on cold. You may be surprised how clean they get and how much money you save.