Finance & Enjoyment Blog

Energy Tax Credit - What You Should Know!

As you are beginning to prepare your taxes there are a couple of federal tax credits that you may want to consider this year as they may save your money.

  • One of which you should look at for money savings is the residential energy tax credit. This tax credit can be up to $1,500 or 30% of the purchase price of items such as central air conditioning, energy efficient windows and doors.  If you have purchased any of these items during the year of 2010 be sure to take this into consideration while preparing your tax information.
  • One unfortunate item regarding this credit, however, is that the most you can receive as a tax credit for energy efficient improvements is $1,500 for both the tax year 2009 and 2010. Therefore if you look at your prior years return and have already taken some of this credit, you must subtract that amount from the $1,500 maximum credit and whatever is left is the remaining credit that can be claimed in 2010.
  • Also keep in mind that the residential energy credit had been extended to 2011. However, the maximum credit will be $500 and the credit amount will be calculated using 10% of the purchase price, with any prior year energy credit amounts counting against the $500 maximum.
  • This energy credit cap does not apply to things such as geothermal heat pumps or solar energy systems, for these items you can take a 30% credit of the purchase price.

As always, feel free to contact us with any of your tax questions, as we would love to help you with any and all of your tax and accounting related needs.

 


Posted in Your Financial House » Rules and Regulations »



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