Tax Credits Homeowners Should Know About
Reducing the cost of owning or renting a home is an area of concern for almost everyone. Even if you can comfortable afford your home, you’d probably rather spend your hard-earned money on purchases you enjoy instead of on taxes. Fortunately for those who’d like a little bit of extra spending room, tax credits can help. Here are a few ways you might be able to save in the year to come.
Reducing the Cost of Energy Upgrades
If you’ve been thinking about transitioning to clean forms of energy, such as solar energy, this is the right time to learn about tax benefits. According to the Department of Energy, Federal tax credits for certain improvements may qualify for breaks amounting to as much as 30 percent of installation costs.
The 30 percent cut applies to a number of system classifications, including solar, small wind turbines and geothermal heat pumps. While renters can’t take advantage of the program, those who own principal residences and second homes can use their rebates for both kinds of property.
Note that each form of upgrade comes with unique eligibility requirements. For instance, your installation should adhere to local fire and electrical safety standards, and it may need to receive certification from a government-approved inspection entity.
Making Fuel Cells More Affordable
If you decide to break free of fossil fuels by installing hydrogen fuel cells, you could be eligible for a 30 percent credit. Unlike the other credit, however, this benefit is capped at $500 per 500W of power capacity. This rebate only applies to principal residences, so save your vacation home’s roof space for solar panels or a turbine to max out on your benefits.
Helping Renters Out
With so many tax breaks only applying to homeowners, you may be wondering how renters can save. Although these individuals and families are generally ineligible for credits, they might be able to save by getting their landlords on board.
The determining factor lies in whether the property owner is improving their own primary residence. For instance, if you rent the entirety of a townhouse, your landlord wouldn’t be able to receive the credit for most improvements because they don’t also reside there. On the other hand, those who sublet rooms or rent apartments whose owners live in the same building might be able to reduce their monthly cost of living by convincing their landlords to make energy-efficient renovations. The owner gets the tax break, and the renter enjoys lower power bills.
Of course, the tax code is complex. In most cases, it’s best to consult with an expert before making any changes, especially if you hope to gain special exemption or rebate eligibility. Learn how your renovation plans might qualify you for savings by visiting Advantage Heating and Cooling today.