Homeowners who didn’t take advantage of those big tax credits for energy-saving home improvements in 2010 are getting another shot at the savings. Although smaller than last year’s offerings, credits remain on the federal tax books.
“Don’t waste time regretting a missed opportunity. Focus instead on the immediate savings you can still get and look forward to the tax savings next year,” says Angie Hicks, founder of Angie’s List, the nation's premiere provider of consumer reviews on local service companies.
“Plugging a big energy leak will save you real dollars, and you’ll see those savings month after month,” Hicks said. “Reputable service professionals can help you find the best project for your particular needs and a good tax advisor will make sure you maximize your investment.”
At least seven energy-saving home projects are available for federal tax credits this year. They include upgrades to heating and air conditioning systems, roofs, insulation, windows and doors. Homeowners can claim up to 10 percent ($500 maximum) on eligible projects in 2011. Last year’s federal credits were three times higher. Some states have additional credits, as well.
More than 90 percent of respondents to a recent Angie’s List member survey have home improvement plans this year, so opportunities for tax credit savings abound. Not every new appliance or product is eligible, though, so check the specifics before you buy, Hicks warns.
Homeowners who are unsure of where to start should hire an auditor to identify the energy hogs in their homes, Hicks said. Some utility companies offer rebates for professional energy audits; others offer the service themselves. Generally speaking, the biggest energy drains in most homes are air conditioners, large appliances and water heaters.
5 of the best energy saving projects:
- The basics: Routine home maintenance saves you money every day. Fixing small problems prevents big emergency repair bills and extends the life of your appliances.
- Best bets: Hire an energy auditor to determine where you are wasting energy. Some utility companies offer rebates or discounts for audits, too. Call yours to find out.
- Repair/replace energy hogs: Do a quick cost-benefit analysis before you replace an older appliance. If it hasn’t reached the halfway point of its useful life, a repair may be the most cost-effective move.
- Refrigerators, freezers, dishwashers, clothes washers/dryers and water heaters should last 10 to 15 years
- Ovens and stoves should last 10 to 20 years
- Central air units should last 15 to 20 years
- Add insulation: More than half the homes in the U.S. aren’t properly insulated even though it’s one of the least expensive – and most effective – energy saving projects. Climate determines what materials you’ll need and how much.
- Easy stuff: Lights are your home’s fourth largest electricity user. High-efficiency bulbs won’t earn you a tax break but you’ll see a drop in your electric bill.
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