If you're looking for ways to save money this year, then investing in energy efficient equipment may be the answer you're looking for. Installing energy efficient products into your home is a great way for you to lower your energy bills and protect the environment. An added benefit is that there are many renewable energy equipment come with tax credits. Below is a brief guide on how you can take full advantage of these tax credits.
Tax Payer Relief Act of 2012
The American Taxpayer Relief act was renewed and came into effect on January 1st 2012 and expired December 31st 2013. If you installed any of the qualifying equipment (see below) you are eligible for this tax credit, which can save you up to 30% on eligible equipment.
What Products Qualify?
Wind Turbine, Solar Water Heater, and Geothermal Heat Pump Tax Credit
This credit is also known as Residential Energy Efficient Property Credit. Energy prices across the US have been slowly rising, and are projected to rise over the coming years. Installing a residential wind turbine or a geothermal heat pump is a wise investment and can significantly lower you energy bill. If you installed one of the following systems mentioned above, you are entitled to a 30% credit of the cost equipment and installation.
Non-Business Energy Property Tax Credit
Is that old water heater acting up again? Well, maybe now is a good time to remove that old appliance. Certain energy efficient home energy products are eligible to receive a credit worth 10%. However, the maximum you can claim is capped at $500. Below is a list of some of the qualifying products. For additional information you can visit the Energy Star website.
- Biomass stoves
- Central air conditioning
- Natural gas, propane or oil furnace
- Insulation such as batts, rolls, blow-in fibers, expanding spray, and pour-in place
- Conventional or tankless water heaters
How to Apply
If you place one or more of the products mentioned abouve in your home during 2013, then you need to file the 2013 version of IRS form 5695. On the 1040 form, you need to enter the from the form 5695 form to line 52 on the 1040 form. Be sure to attach the 5695 forms when you file your 2013 taxes.