Spring is around the corner, (believe it or not) and it’s in the nature of homeownership for our thoughts turn to what we can do to improve our homes. Home Improvement stores just love us at this time of year, as a trip to Lowe’s will confirm. Now I’m not here to write about the “sexy” improvements today, you know the fresh paint and ceramic tile and fun stuff that you enjoy doing. I’m here to remind you that any updating you do that conserves energy may be eligible for federal tax credits.
Now these updates may not be as much fun to do, but they definitely improve your quality of life. And considering our heating bills this year with yet another really rough winter, I’d say anything you do in this area will give you a very good ROI (return on investment) too.
Tax credits are available for eligible purchases at 30% of the cost up to $1,500 for 2009 and 2010. Some of the more common eligible purchases are windows and doors, insulation, heating and air-conditioning systems and water heaters. It will save you money in the long run to buy energy star products anyway – And then the icing on the cake is a tax credit on your purchase too. Too good a deal to pass up if you ask me!
The first thing to do if you’re living in an older home in Iowa City is to check out how much insulation you have in your attic. It used to be standard for homes in our area to have a 3 – 4 inches of insulation in the attic. Current data shows us that we need a minimum of 10 – 14 inches, (depending on the type of insulation used), to effectively keep the heat in our homes from going up and out of the roof. In fact, adding just 10 inches of insulation is likely to save us 20% on heating cost. Insulation is pretty cheap, so we’re talking a good bang for the buck with this one!
Before you get started, we know we can rely on the government to complicate the process when it comes to the eligibility requirements for this credit, so the best thing is to do is go to the government’s EnergyStar Website and check out exactly what qualifies for the credit. Just as an example, the standard requirement for windows in 2009 was different to 2010(!)
Below are some of the basic eligibility requirements for some standard home improvements. There are different time lines and requirements for solar, wind and geo-thermal energy that I haven’t mentioned here. You’ll find more info about that on the EnergyStar Website.
- The tax credit is available for products “placed in service” from January 1, 2009 – December 31, 2010
- Eligible on improvements to the homeowners primary residence only
- Installation costs are not eligible for the tax credit
- A total of $1500 can be claimed in the two year period 2009 through 2010
