Monday, November 9, 2009

IRS Home Improvement Tax Credits!

It's not often the Internal Revenue Service tries to help you save money. So, if you're looking to make a few home improvements, you may want to get to work while the government is in a giving mood.

"There's actually a way for homeowners to invest in some energy efficient improvements and actually save some money twice," said the IRS's Michelle Eldridge.

It's part of the American Recovery and Reinvestment Act. Make your home more energy efficient and get back part of what you've spent at tax time.

"Replacing windows and doors or perhaps replacing your heating and air-conditioning system or maybe adding insulation. All of these products, even roofs in some cases, can qualify you for this energy credit," said Eldridge.

Here's how it works. You get to claim 30 percent of the cost of improvements up to a maximum tax credit of $1,500. Installation costs, though, do not apply.

But Eldridge says do your homework and make sure the product qualifies before you buy.

"What you're looking for is a tax credit certification from the manufacturers," she said. Keep those certifications and receipts to then file with your tax return.

The government's message is save now while improving your home's value, and save later with lower energy bills. But time is running out for the 2009 credit.

"You need to make this purchase and have it installed by the end of the year," Eldridge said.

The good news is the credit extends into next year as well if you need more time.

There is a second tax credit for homeowners investing in alternative energy equipment. If you're looking to add solar electric systems, solar hot water heaters or even wind turbines at your home, you can deduct 30 percent of the cost on your 2009 or 2010 taxes. And best of all, there's no cap like the earlier credit.

For more information, check out the Internal Revenue Services' website.