Be careful, be cautious and save every single piece of evidence that you receive from the manufacturer. Don’t throw anything away, save it all so if and when the IRS audits you, you can prove that your energy tax credits are accurate. Otherwise, well you know what will happen if you can’t prove your case.
To refresh your memory, the energy tax credit was signed into law on August 8, 2005. AKA the EPACT and allows homeowners to claim a tax credit based on certain environmentally friendly home improvements that are made to your home. You absolutely have to know what improvements qualify and how to claim them on your yearly taxes.
With the added tax incentive many homeowners are choosing to pay more for the required energy efficient building products that will improve the efficiency of their home. Not only will the government help pay for the products by giving you tax credits on your yearly taxes, but the energy efficient products will help the environment as well.
Energy Star Tax Credit will be given for all Energy Star Products. You will be able to claim a tax credit based on a percentage of your home improvement costs. The government checks your qualifying improvements, and they determine any tax credit you claim. Don’t think you can get away with any old tax credit; because you need to know the guidelines.
Some of those qualifying improvements include: exterior doors, windows and skylights; metal roofs; insulation systems; energy efficient HVAC; solar power and solar heating systems; and fuel cell power systems; and of course Energy Star products.
Before you hire a contractor to do any Energy Smart Improvement make sure he knows the requirements so you will be able to claim your tax credit. The contractor needs to be able to provide you with all the necessary paperwork or your tax credit will not be allowed. He also needs to know the energy efficient building products to use in every aspect of the project.
When you count on the credits to pay for part of the products if the contractor tries to cut corners, the government will not allow the credits to go through.
That is just one reason to hire a contractor who is licensed, bonded and insured. Check his references to be sure his customers were happy with the tax credits they received because he followed the rules closely.
Home Improvement Guide specializes in home improvement specialists, local home remodeling pros and Orange County solar power.
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