Tax Breaks For Going Green
Elizabeth Brokamp over at The Motley Fool got a rude awakening this summer. After the fact, she found out that the air conditioner she put in after her old one conked out isn’t energy efficient enough to get her a tax break. That revelation got her to looking into home improvement projects that do save you money by making your house a little greener. So if you need a way to offset some capital gains this coming tax season, here’s a short list:
- Replace old exterior windows and skylights with new energy efficient designs and deduct 10% of the cost (up to $200). (See my article A Clear View On Glass for more information on selecting windows.)
- Replace old exterior doors and deduct 10% (up to $500).
- Upgrade your insulation to DOE regional standards. This can be complicated. Check with your contractor for what requirements meet your local “standards” for energy efficiency. Also be aware that most insulation on the market isn’t green — far from it! If you have the money, sprayed in expanding foam insulation is by far the best choice for a stud-built home, and there are some very green formulas.
- Mrs. Brokamp also recommends replacing your roof “with a pigmented metal roof”. Replacing your roof (if you need one) is certainly not a bad idea, but “pigmented metal” roofing is hardly the only roofing system out there that meets Energy Star standards. There are a good number of standing seam roofing systems that qualify. The one that’s right for you will depend on where you live. There are also non-standing seam roofing systems that qualify, such as the solar membrane roof. Your new roof not only protects your home, but generates electricity too! Unfortunately, according to Mrs. Brokamp you can only deduct 10% of the cost of the materials up to a max of $500 which, given the cost of a roof system and its installation, is a joke.
- Update heating and cooling systems with energy efficient (i.e. Energy Star) models.
- Go solar! Solar hot water and solar electricity both qualify for tax exemptions — though as with everything that has IRS attached to it, there are a ton of “ifs” “ands” and “buts”.
Still, at least the government is doing something to encourage us to improve the energy efficiency of our homes. So if you need a a few more deductions for your 2007 taxes, and are looking to sink a few dollars into the old homestead, here are some things to look at.
You can read Mrs. Brokamp’s entire article here.
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