RSS/ATOMSolar Tax Credits and other ways to Reduce your Tax Bill
By sblackb • Mar 26th, 2008 • Category: Alternative Energy SourcesOver the past couple nights, I’ve been going through the litany of questions that is Turbo Tax. When I reached the deduction section, things got a little more interesting. We installed a new, efficient central AC this year to replace our ailing 1996 model which netted us a $300 tax credit. That’s not much in the grand scheme of things, but I’ll take ever tax shelter I can get. You might be surprised what you can save by improving the energy efficiency of your home; not just in smaller power and gas bills, but in your tax liability. Here are a few of the energy Credits that you can deduct for the 2007 tax year:
Exterior windows and doors- Insulation (we have plans to do this in our attic for 2008)
- Central Air
- Air Circulation Fan
- Electric Heat Pump water Heater
- Natural Gas, Propane, or Oil water heater/furnace
- Metal Roof ( Must meet Energy Star Requirements)
- Electric Heat Pump
- Geothermal heat pump
- Hot water boiler
- Solar Panels
- Solar Water Heating Equipment
Sorry, all those CFL bulbs that you just installed don’t count.
Link to more Details: Energy Star
Current State of the Tax Credits
The 109th Congress passed legislation to extend the 30% solar energy investment tax credit for homeowners and businesses for one additional year, through the end of 2008. The bill contains the following provisions: (1) Residential Solar Tax Credit: Extends a 30-percent tax credit, created in the Energy Policy Act of 2005, for the purchase of residential solar water heating, photovoltaic equipment, and fuel cell property. Expires after December 31, 2008; and (2) Business Solar Tax Credit and Fuel Cell Tax Credit; Extends a 30-percent business credit, established in the Energy Policy Act of 2005, for the purchase of fuel cell power plants, solar energy property, and fiber-optic property used to illuminate the inside of a structure. After December 31, 2008, the credit reverts to a permanent 10-percent level. Many in the industry cautioned that the lifespan of the credits is too short to encourage significant industry growth and long range planning.
This means that residential will lose all solar tax incentives after this year and Business Solar Tax credits will be reduced to 10 percent. There is a lot of support for extending the credits into 2009 and beyond, but given our current congress and their inability to get anything done, I would suggest you take advantage of any credits this year. Otherwise, you may be wishing you did later.
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sblackb is Scott and Liz share a passion for the outdoors and want to help protect the natural beauty of our planet. Scott feels like one of the best ways to accomplish this is to take on responsible power use, generation and learning new methods for better living with less resources.
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