2011 Energy Tax Credits: Good Information to Know
Although federal energy tax credits are not as generous as in the past, you can still reap the benefit. First let me define tax deduction vs. tax credit. Tax DEDUCTIONS only reduce your taxable income. Tax CREDITS give you a dollar-for-dollar reduction in your tax LIABILITY. (Better!)
In a recent article authored by Donna Fuscaldo, contributor for personal finance for Dow Jones Newswires, the Wall Street Journal and Fox Business News, Ms. Fuscaldo explains that for 2011 tax credits can be taken for up to $500 for some home improvements. Systems included are roofs, HVAC, windows, doors, skylights, water heaters and insulation. Credit is only extended to 10% of the cost with $500 as a lifetime limit.Improvements also need to meet IRS energy efficient standards in order to qualify. In some cases installation can be covered but the policy can be tricky. To determine if the system you installed is eligible for tax credits, go to Energy Star's website for detailed information. Talk to your vendor too. Save your receipts and file IRS Form 5695 with your 2012 tax forms. For more detailed information visit the link, Good Luck!