Americans will spend an estimated $317 billion on home improvements in 2017—which represents a 6.9% increase over the 2016.¹ Those looking into environmentally minded home modifications may get a boost from Uncle Sam’s tax incentives. Here’s how:²
Tip: DSIRE is a comprehensive source of information on local, state, federal, and utility incentives and policies that support renewable energy and energy efficiency.
Source: DSIREusa.org, 2017
The Energy Property Tax Credit
Tax credits for energy efficient home additions have been extended to 2016. This means these types of improvements may be eligible for a 10% tax credit up to $500, excluding installation costs. This is a lifetime limit however, so if you have taken the credit in the past, your savings may be reduced.³
As for what qualifies, improvements must be to your primary residence and they must be found on the “Federal Tax Credits for Consumer Energy Efficiency” list. The list includes additions under the categories of biomass stoves, heat pumps, air conditioning, boilers, furnaces and fans, insulation, roofs, water heaters, windows, and doors.
Alternative Energy Improvements
But what if you want to be even more environmentally friendly? If you install an alternative energy source for your home, such as a geothermal heat pump, a small wind turbine, or a solar-powered energy system, you may be eligible for a rebate of up to 30% on the price. That means you potentially can get a third of your money back. And unlike other tax incentives, this one applies to both principal residences and second homes.⁴ However, depending on the improvement, it may have to be completed by December 31, 2016 to receive the credit.
Installations aren’t the only way to make tax-friendly improvements to your home. What about the tax benefits of clearing some techno-clutter?
When you donate your used electronics, you potentially can deduct the fair market value of each piece, which you determine. (To get an idea of fair market value, you can consider looking at what similar items are selling for at various online auctioneers.) Donating old electronics can help you save space, not to mention helping someone in need.
More and more homeowners are looking into the benefits of energy-saving home improvements. If you opt to “go green” this year, don’t forget to consider what tax breaks may be available. Tax laws are constantly changing, so before committing to an improvement project, consult legal or tax professionals for specific information regarding your individual situation. Also, the information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties.
1. Joint Center for Housing Studies, 2017
2. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.
3, 4. Energystar.gov, 2015
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2021 FMG Suite.
DISCLAIMER: This website is for informational purposes only and does not constitute a complete description of our investment advisory services or any past performance. This website is neither a solicitation nor an offer to sell securities or investment advisory services except where we are appropriately registered or exempt from such registration. Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding market or other financial information, is obtained from sources which we and our suppliers believe to be reliable. However, we do not warrant or guarantee the timeliness or accuracy of this information. Nothing on this website should be interpreted to state or imply that past results are any indication of future performance. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS OR ANY ‘LINKED’ WEBSITE.Back