Home improvement season is here and Better Business Bureau is offering advice on how to take advantage of tax credits being offered by the Federal government.
The American Recovery and Reinvestment Act of 2009 included several new tax and expanded credits that homeowners can take advantage of while increasing the energy efficiency of their home. According to Remodeling Magazine's 2008-2009 Cost vs. Value report, energy efficient replacement projects are some of the best bets for recouping money at resale. Some qualifying improvements include routine work that every homeowner must undertake now and then, such as installing a new roof. However, other qualifying improvements are more involved including installing a wind or solar energy system.
“Increasing the energy efficiency of your home is one way to cut down on monthly bills, and now is a great time to make some modest home improvements to take advantage of federal tax credits and boost resale value,” said Matthew Fehling, BBB President/CEO. “Before making any energy saving purchases, do your homework because not all products qualify for a tax credit and not every product with an ENERGY STAR seal will apply.”
To qualify for tax credits, improvements must typically be made on the owner’s primary residence. Homeowners should keep in mind that just because a product has an ENERGY STAR seal—the Environmental Protection Agency’s standard for energy efficient consumer products—it doesn’t mean the purchase qualifies for the tax credit. For the following home improvements, a household can generally take a tax credit for 30 percent of the improvement cost up to $1,500 total for all improvements made.
• Windows and doors including energy efficient skylights, storm windows, exterior windows, storm doors and exterior doors;
• Roofing and insulation, including metal or asphalt shingles;
• Heating and cooling systems including energy efficient central A/C units, oil and gas furnaces; and
• Water heaters including energy-efficient gas, oil, or propane water heaters and electric heat pump water heaters.
A full list of qualifying home improvements is available online at: www.energystar.gov/taxcredits.
BBB offers the following advice for homeowners on finding a company or contractor they can trust to help make their house greener:
• Always check the company or contractor out with BBB first. BBB Reliability Reports are available online for free at www.arizonabbb.org and will tell the homeowner if the business has a good rating and is accredited by BBB. Consumers can also check with the Arizona Registrar of Contractors, www.azroc.gov for information on licensed contractors.
• Homeowners should get several estimates for projects and remember that they do not have to use any specific contractor in order to take advantage of the tax credits.
• Before making any improvements, visit www.energystar.gov to confirm that the products being used are eligible for the tax credit. Also consider consulting the IRS Web site at www.irs.gov or a tax professional.
For more information on making home improvements visit www.bbb.org.
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BBB is an unbiased organization that sets and upholds high standards for fair and honest business behavior. Businesses that earn BBB accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. Incorporated locally in 1938, today your BBB serves communities in Central, Northern and Western Arizona, supported by over 9,500 BBB Accredited Businesses. BBB provides objective advice, free business BBB Reliability ReportsTM and charity BBB Wise Giving ReportsTM, and educational information on topics affecting marketplace trust.