Tips for Stress free life > Expert Zone > Home Improvement
Home Improvement Tips
|
| |
|
| |
|
|
Tips for Stress free life > Expert Zone > Home Improvement Home Improvement Tips |
|
|
|
|
New Tax Breaks for Energy Efficient Home Improvements
If you would like to make your existing home more energy efficient and get some help paying for the improvements, you need to know about the Energy Tax Incentives Act of 2005. The new law provides a $500 lifetime credit against your federal income tax for the cost of certain energy-saving home improvements that you make to your home after December 31, 2005 and before January 1, 2008. Up to $200 of the tax credit may be applied to windows. As you may know, a tax credit is far more favorable than a deduction of the same amount. Deductions only reduce the amount of income that is subject to tax. A tax credit, on the other hand, is a dollar for dollar reduction of the tax due when you file your income tax return. So, if you are in the 28% income tax bracket, the new $500 credit is equivalent to a tax deduction of nearly $1800! Here are highlights of the new provisions: There is an overall lifetime cap on the credit of $500, and a maximum of $200 of the credit may be applied to qualified window expenditures. Subject to those limitations, you may receive a credit for the sum of the following: Building Envelope Components. Ten (10%) percent of your expenditures for so called "building envelope components" will qualify for the tax credit. Building envelope components include the following:
To qualify for the credit, the building envelope components must be installed in or on a dwelling unit (including a manufactured home) located in the United States that is owned by you and used by you as your principal residence. Installation of envelope components in a second or vacation home or rental property therefore will not qualify for the new tax break. Only new components are eligible for the credit and the components must reasonably be expected to remain in use for at least 5 years. Energy efficient property expenditures. Amounts paid for "residential energy property expenditures" will also qualify for the credit up to the following specific limits:
Expenditures for labor costs for onsite preparation, assembly or original installation may be included. Improvements must be installed in or in connection with a dwelling unit located in the United States that is owned by you and used by you as your principal residence. There are energy efficiency standards described in the new law that your home improvements must meet, so some investigation on your part will be necessary to be sure that the improvements will qualify for the credit. For this reason, if you hire a third party to do the work, your written agreement with the contractor should include the contractor's guaranty that the installed property will meet the energy efficiency standards of the new law. There is one potential trade-off, if you use the credit. Many improvements to your home will increase your "tax basis" in the property, and this increased tax basis may, in turn, reduce the amount of capital gain that is realized if you sell your home at a profit. The increase in tax basis that would otherwise result from energy efficient improvements that qualify for the credit will be reduced by the amount of the allowed credit. Since the tax credit decreases your tax basis, you are likely to have more capital gain at the time of sale. This will not affect you if all of the capital gain realized at the time of sale is protected by the $250,000 exclusion ($500,000 for married couples) for gains realized on the sale of your principal residence. But even if there is an increase in the taxable capital gain realized when you sell your home, it will almost certainly be outweighed by the advantage of using the new income tax credit currently. Like so much of the Internal Revenue Code, the new provisions encouraging energy efficient home improvements seem unnecessarily complicated, but we have to consider the source - Congress! However, a bit of patience and careful planning will bring you some very real tax savings and help the environment to boot! John Pollock is an attorney practising in Detroit, Michigan and the webmaster of http://www.forms-free-4-all.com
MORE RESOURCES: Group advocates tax increases and non-user fees for sewer debt relief - The Birmingham News - al.com
Debt-Relief - Google News |
 |
|
|
RELATED ARTICLES
Bring Out the Comforters for Back to School If the weather is turning chilly it must time for the kids to go back to school. Bring out the comforters, flannel bed linens, quilts and stadium blankets. Why Hardwood Flooring is a Good Investment Hardwood flooring has a timeless air of qualityHardwood floors have decorated some of the most exclusive mansions and estates in history and still exude a feeling of permanence and classic quality compared to manufactured floors.Hardwood floors are naturalHardwood floors bring the natural outdoors inside, and do not contain man-made chemicals in the wood itself. Lakeside Patios - The Water Makes Decisions For You If you are putting in a new patio on a lakeside, you have unique considerations that other homeowners do not have when it comes to purchasing patio furniture.We built a new patio on a 700 acre lake and I had to look around for just the right outdoor furniture. The Truth About Honda Pressure Washers "What they don't tell you about Honda Pressure Washers"I recently received the following e-mail regarding honda pressure washers:"I was unaware Honda made pressure washers. I can get one locally now that I have seen your web page". The Mighty Dust Mite and How To Deal With It A Closer Examination of the Dust MiteThe dust mite's mouth parts are grouped in front of the body, resembling a head. Their body is oval and covered with fine striations. This Is Why People Should Consider Granite Countertops Granite countertops are among the most beautiful things you can add to your kitchen. Kitchen countertops gain a beautiful glow from these pieces of art. Make Your House A Home When thinking about polished floors, cushions in place, an exquisite flower arrangement, crisp and folded napkins on the table, take time to think about comfort, family time and kids activities also when decorating or designing your house. A lively place full of warmth and chatter is what makes a 'House' a 'Home'. So Youve Decided to Finish Your Basement! When a family decides to finish a basement space, there are so many factors to consider it can seem overwhelming. What does your family want to achieve within the new basement? Are you looking for a play area, a family room, a work-out room, home theatre, bedroom, bathroom, kitchen, wet bar, etc? Do you have the square footage required to accomplish what you want? How do you get started and how long will it take? How much will it cost and is it worth the money? What if there is a huge beam in the center of you basement? Do you have to have a building permit? Do you have to remove the items you currently have stored in your basement?If these questions make your head swim, try this approach: look for the right team of design/build consultants to navigate you through these waters. Is a Hot Tub for You? Top 5 Questions You Need to Answer As a way of relaxing, more and more people are adding a hot tubto their home. Not only are hot tubs relaxing but they alsooffer tremendous benefit for people of all ages. Why You Might Need a Waterproofing Consultant Waterproof consultants perform a wide variety of functions. Why should you hire a waterproofing consultant for your project? Firstly, professional consultants in this field are often very knowledgeable in finding the problem and the best way to fix it. Planning For a New Deck Part of the fun of a new deck is the planning! When you plan your deck, you can let your imagination run wild and add all kinds of fun features. As your planning process moves forward, you can whittle down your design to a more practical (and buildable) plan. Cheap Interior Design Ideas Cheap interior design ideas come in many forms these days. From television shows to magazines, the industry is trying to teach the consumer how to design cheap. Get Your Home Ready To Sell Have you been considering selling your home in the near future? If you have, then it wouldn't be a bad idea to take a good long look at your home, using an unbiased eye.After all, a clean, appealing, well maintained home has much better odds of selling, selling for more, and selling faster. Choosing A New Floor Is it time to give that tired kitchen floor a face lift? Are you looking for just the right finishing touch for your new living room? The floor you choose can brighten a dark room, make a small one appear larger, or set the mood and tone for the rest of your decorating. There are so many flooring options available on the market these days that you're biggest problem will be deciding which floor you like best! Here are a few suggestions to ease your decision process. Building a Home Addition Besides providing your home with more living space, a home addition can be a terrific investment. However, before embarking on such a project the homeowner should first consider several important items. Color Help: Choosing Color Combinations Choosing a color scheme can be a nerve-wracking business. For instance, I anguished over the colors to paint the exterior of my Victorian house, I ordered every book on old house painting that I could find, and I discovered that they all contradicted each other on the basic "rules. Dual Pane Window Glass Repair For the past few weeks, I have been explaining how to repair a broken window pane in your home. But, what if you have dual pane windows? Is the process the same? Well, pretty much, except for a couple of variations. Planning Permission Tips UK - Illegal Building Works - Is there an Upside? Many times throughout the year we are called in to assist people who have got into trouble by completing building works without Council permission. This can be either Planning or Building Regulations - often both. Seven Interior Design Psychology Ideas for Dining Pleasure A separate dining room adds glamour, elegance, and excitement to a shared meal. Celebratory, sociable space, apart from the confusion of the kitchen, makes every dinner more meaningful. A Few Concrete Suggestions Up until a few years ago, my professional experience was in industries including retail, energy, health care, and fast food. In 1996 circumstances and opportunity led me into the manufacturing, marketing, and installation of products used for Floor Warming, Total Space Heating, Roof Snow and Ice Melting and Snow and Ice Melting of driving and walking surfaces.
|
|
You are here |
|
| Home Improvement | Home Improvement - Complete list | |
|
| Main Home | | Meditation Corner | |
|
|
| Recommend us | |
|
[About
us] [Contact] [Privacy
Policy]
Copyright 2006, Meditation
is Easy.com, All
rights reserved
