Home improvement season is here, and the Better Business Bureau is offering advice on how to take advantage of tax credits being offered by the federal government while increasing home energy efficiency and helping the environment at the same time.
The American Recovery and Reinvestment Act of 2009 included several new and expanded tax credits that homeowners can take advantage of, and according to Remodeling magazine's 2008-2009 Cost vs. Value report, energy-efficient replacement projects are some of the best bets for recouping money at resale. Some qualifying improvements include routine work that every homeowner must undertake now and then, such as installing a new roof. Other qualifying improvements are more involved, including installing a wind or solar energy system.
“Increasing the energy efficiency of your home is one way to cut down on monthly bills, and now is a great time to make some modest home improvements to take advantage of federal tax credits and boost resale value,” said BBB CEO Bonnie Bakin. “Before making any energy-saving purchases, do your homework, because not all products qualify for a tax credit.”
To qualify, improvements must typically be made on the owner’s primary residence. Homeowners should keep in mind that just because a product has an ENERGY STAR seal—the Environmental Protection Agency’s standard for energy-efficient consumer products—it doesn’t mean the purchase qualifies for the tax credit. For the following home improvements, a household can take a tax credit for 30 percent of the improvement cost, up to $1,500 total for all improvements made.
- Windows and doors, including energy-efficient skylights, storm windows, exterior windows, storm doors and exterior doors
- Roofing and insulation, including metal or asphalt shingles
- Heating and cooling systems, including energy-efficient central A/C units, oil and gas furnaces
- Water heaters, including energy-efficient gas, oil or propane water heaters and electric heat pump water heaters.
A full list of qualifying home improvements is available online at energystar.gov/taxcredits.
BBB offers the following advice for homeowners on finding a trustworthy company or contractor to help make their house greener:
- Check the company or contractor out with BBB first. Reliability reports are available for free at bbb.org and will tell the homeowner if the business has a good rating and is accredited by BBB.
- Homeowners should get several estimates for projects and remember that they do not have to use any specific contractor in order to take advantage of the tax credits.
- Before making any improvements, visit energystar.gov to confirm that the products being used are eligible for the tax credit. Also consider consulting the IRS website at irs.gov, or a tax professional.
For more information on making home improvements, visit bbb.org. iBi
