Four Home Upgrades Worth the Tax Break

MSN Money lists four home upgrades worth the tax break as follows:

• Adding insulation - Insulation is the cheapest home improvement that qualifies for the tax credits, says Karen Schneider, a spokeswoman for Energy Star. And by installing it you could save up to 20% on your energy bills.

• Replacing windows and doors - Before, tax credits for windows and doors were capped at $200. Now you can get up to $1,500. But that's only if those doors and windows meet certain criteria.

• Installing air conditioners - Energy Star estimates the retail price and installation of a 5-ton central air conditioner at more than $1,700. That's hardly cheap, but these systems need to be replaced only once every 10 to 12 years, Schneider says.

• Putting on a new roof - Assuming your roof is around 15 years old, replacing it with a metal or asphalt roof that meets Energy Star requirements will help keep your home cool by reflecting the sun's heat, especially if you live in a warm location, Schneider says.

We could actually be in the market for three out of four of these. The details:

1. We need a bit of insulation added to our attic. It's been on my to-do list for years, maybe this is the incentive I need to get it done.

2. We have several windows that need to be replaced. Thought about doing it last year -- glad now that we waited.

3. Both our AC and heater are on their last legs, so we'll probably be doing this one for sure.

4. Doh! We put a new roof on two or three years ago. Dang!

How about you? Any of these look worthwhile?

And for those of you interested, here are some more ideas for saving while also going green.

Comments

[MC]

Maybe I'll do some window replacements, but I'd rather wait until next year. Any idea if these credits will be around next year too?

[Wise Money Matters]

I've been looking at upgrading our insulation and windows for a while now. This might be the incentive to do it.

[Holly]

Did the roof a few years ago, and won't be replacing that anytime soon. However we just replaced our AC this week. I'm a little dumb about these things though -- how do I find out if we qualify for the rebate, and if so, how much it will be?? (That link just confused me...had no idea how to fill in the blanks.)

[meoip]

www.energystar.gov will have the information on qualifying.

I'm a roofing professional and depending on your roof and where you live you can get an even better deal if your roof has sustained storm damage (usually wind and hail). If you have qualifying damage your insurance company should give you funds for the project, which can be used to purchase or upgrade to a qualifying product.

[Craig]

I just tore down the walls of a recently purchased older home and found no insulation. I'm putting up insulation and new drywall (couldn't stand the plaster look). Do I just have to keep the receipts for the insulation in order to file for the tax break?

[Andy]

I got new windows and sliding glass doors a few years ago. I went from aluminum, single pane to energy star approved vinyl replacements. I got them changed out in January (in Ohio) so I could feel the effects immediately. I could also see the effects as well, my curtains no longer swayed in the "wind." One unintended benefit was noise reduction. I lived in a condo on a busy street. The first time I turned on my TV after I got the new windows and doors I was amazed at how loud the TV was. I had to cut the volume in half.

In my opinion, the tax credit and utility bill savings definitely help make the expense worth it. But the added benefits that you do not think about beforehand can add to your quality of life as well.

[Christy]

We replaced the roof last year - if I only knew then to wait a year!

We're currently considering replacing our windows which are single pane aluminum frame, from the 50's. They are drafy and do not do anything to block the street noise, so it's pretty much a no-brainer they need to be replaced. We are also considering another option, Magnatite Windows, which is less costly but still provides insulating and noise reduction. Supposedly, this product is also eligible for the tax credit.

[Kris]

You have to get a pretty high-end AC to qualify for the credit. We just bought a new a/c and spent $2500. We would have had to spend at least $1K more and upgraded our furnace to make the qualifying a/c work.

[F. Morana]

CAN SOMEONE REFER ME to where in the tax code (which publication? which form?) one can obtain the tax credit for adding insulation?

Thanks,
Frank

[FMF]

Frank --

I suggest you check out IRS.gov

[Keith]

My fiancee and I recently upgraded our windows to Energy Star ones. We got the free upgrade to the windows that qualify for the deduction because the contractors are so slow, they appreciate the business. We used our $7500 tax credit to buy them so that's a win/win for us. I definitely recommend it.

Also, our state (Pennsylvania) has a program where you write down how much energy you've used in the past on some forms, then after you install the windows, they ask you to submit your energy usage for the next year. You get a $250 check cut 10 days after the windows are installed. The PA website is http://www.keystonehelp.com/