By installing insulation, replacing leaky windows and doors, and replacing old furnaces and air conditioners with energy-efficient models, you can raise your comfort level and lower your energy bills. Yes, these projects do cost money but it will be for your benefit at the end of the day.
If you install qualified insulation or energy-efficient replacement windows, doors, or skylights in your primary residence, then you are eligible for a federal tax credit. A tax credit, which reduces the amount of tax you owe, is more valuable than a tax deduction, which only reduces the amount of income subject to tax. A few examples that could qualify as tax credits are:
- Exterior doors and windows
- Storm windows
- Skylights
- Metal roofs
- Insulation
- Central air conditioning and heating
- Hot water boilers
- Advanced main air circulating fans
The basic requirements are that you purchase and install qualifying energy-efficient property in your primary residence in the years 2006, 2007, 2009, or 2010. You must buy new energy-efficient products, and it must be expected to remain installed for at least five years.
There is no income-eligibility limit, so anyone, regardless of income, can claim the home-energy tax credit. You just have to fill out Form 5695 when you file your next tax return.
For homeowners who install renewable-energy devices such as geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems, an even bigger tax break of 30%, with no maximum amount, is available. These qualifying improvements can be installed through the year 2016.
In addition to federal tax credits, there are a large number of states and local governments that are offering energy tax credits as well. On top of that, many utilities have rebate incentive programs to cover the costs of energy efficient upgrades. Subsidized home energy audits are also being offered by various utility companies. What this does is help you detect where you are losing the most energy from your house or are using inefficient appliances. This is a great start for you if your energy bills are high, but you do not know why.
Because there are so many rebates and incentives available right now, energy tax credits are definitely worth it. You will be spending less for the efficient versions, and in some cases, people do not even have to spend anything or they make a net income on their upgrades. All you have to do is just sit down, put in the numbers, and see if it makes sense financially.
Every summer, Archana works at Kumon, a math and reading workshop, tutoring children between the ages of three and 18 in these subjects. She used to be enrolled in this program herself, so this allows her to connect with the students and give them the one-on-one help that they need. Archana is also currently a member of NC State’s Psychology Club, Rotaract Club, and EKTAA (NC State’s premiere South Asian Student Organization).
Archana was born in India, and moved to North Carolina with her immediate family when she was 7 years old. She speaks mostly Tamil, the native language of South India, and English in her home. In addition, having taken Spanish classes since 6th grade, she can speak and understand it pretty well too. Archana enjoys spending time with her family and friends, watching movies, listening to music, and going to the gym. She also loves to travel, and hopes to travel the world one day and learn about all the different cultures!
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