How Going Green Saves You Green on Your Taxes

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We all know that turning off the lights when you leave a room can add up to big savings on your electric bill. Keeping a moderate finger on the thermostat during the summer and winter months can make a large impact as well. Here are a few other energy and money saving tips:

  • Recycling
  • Carpooling
  • Rechargeable Batteries
  • Cloth Napkins
  • Compost
  • Repairing Leaky Faucets

Now, let’s think big – it’s time to consider renewable home energy systems as your next step in living more earth-conscious. Nothing says green like renewable energy! And thanks to Uncle Sam, you can save plenty of green with a hefty tax incentive as well.

The IRS tax credit for renewable energy solutions for your home covers up to 30 percent of the cost of residential solar energy systems, solar fuel cells and wind turbine systems. However, to get the credit, the energy system must be for your primary residence – rental properties cannot claim this credit.

Non-Business Energy Property Credit

If you’ve made energy efficient improvements to your home this credit good for up to $500 of the cost of materials and installation was extended through 2017. Purchases and installations that allow you to claim the Non-business Energy Property Credit include high efficiency:

  • Heating Equipment
  • Cooling Equipment
  • Water Heater
  • Insulation
  • Windows
  • Heat-Reducing Roof materials
  • Biomass Stoves
  • Attic and Whole House Fans

Electric Cars and Credits

There’s good news if you’ve purchased a fully electric or plug-in hybrid vehicle…good news in the amount of a $2,500 – $7,500 tax credit. And when you drive green, the IRS wants to give you back some green. The IRS recently extended the tax credit for qualified electric plug-in vehicles through 2017.

Federal Tax Credits for  Qualified Electric and Plug-in Hybrid Vehicles cover vehicles that were manufactured by a certified car maker, not vehicles that have been converted to electric or hybrids. Also, this credit doesn’t cover golf carts or go-karts – a full list of credit amounts and requirements can be found at the government’s fuel economy website.

If you’re considering making energy efficient improvements to your home this year, you can save money on your taxes when you file your 2018 taxes if you install residential solar energy systems, solar fuel cells and wind turbine systems in your home. The Non-Business Energy Property Credit for improvements like insulation, windows, and water heaters and the credit for electric plug-in vehicles was only extended through 2017 so far. Continue to check back with TurboTax and we will keep you updated on whether the Non-Business Energy Property Credit and the credit for electric vehicles are extended past 2017.

Still need to file your 2017 taxes? If you made any of these energy efficient improvements last year, don’t worry about knowing how to figure out energy tax credits. TurboTax will figure them out for you and give you the tax credits you deserve based on your entries.

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