Keeping your home as efficient as possible is one of the most important parts being a home owner. Green remodeling saves you money, keeps your home comfortable and helps the environment at the same time. However, when you decide to live a low energy lifestyle, you also qualify for federal tax credits this year, due to the year-end fiscal cliff budget deal.
If you had made home improvements in 2012 and wish to take advantage of the 10% credit available to you, these tips will help you maximize the available credit.
1. IRS Form 5695 That form contains the specifications needed to qualify. Once you have taken a look at the form, go through all of your receipts and make sure the materials and appliances you purchased match the IRS guidelines.
2. Resale Return Even though green remodeling is a great way to go, the National Association of Realtors states that most buyers don’t consider that factor as highly as others when purchasing a home. Be careful not to overestimate how much value these new features give to your house. However, there are certain exterior remodeling projects that pay off big, including siding, replacement windows, and entry doors. Some of these these qualify for the credit if they are energy efficient.
3. Monthly Savings To make your home a better candidate, track your before and after monthly energy bills. By showing the potential buyer the difference between before the energy efficient appliances were installed and after, they may be more likely to buy the home at a higher price.
4. Review Past Years This credit tops out at $500, but it’s also cumulative over several years. If you hadn’t claimed your energy efficient purchases and home improvements in years past, you may be able to claim them on your 2012 tax return.
Some of the upgrades which qualify for this credit are Energy Star rated windows, doors, appliances and more efficient heating or cooling systems. Installation costs may also go toward maximizing this credit. Always remember to save your receipts and keep them handy when tax time comes.
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