Tax credit and deduction tips for home improvement in 2012

By: ARAMatchbin
December  22, 2011 01:00 AM
With the new year under way, you may be  thinking about needed home improvements and how you’ll use your credit to fund  them. While it’s important to understand your creditbefore making  major home improvement decisions, you should also consider another kind of  credit – tax credits for energy efficient home improvements.For  the past few years, the federal government has offered tax credits for certain  home improvements aimed at increasing a home’s energy efficiency. While the most  popular and generous tax credits, such as the one that allowed you to claim up  to 30 percent of improvements such as a new roof or hot water heater, have  expired, you can still get credit for other significant energy-efficient  improvements.According to EnergyStar.gov,  you can claim a tax credit for 30 percent of the cost of installing a geothermal  heat pump, small wind turbine or solar energy system in your home. The credit  has no upper limit and applies to both existing homes and new construction, but  not to rental properties. This credit is good until Dec. 31, 2016.You can also get a credit of up to 30 percent of the cost of residential  fuel cells, up to $500 per .5kW of power capacity, EnergyStar.gov says. This  credit is also available until Dec. 31, 2016.While the initial  cost of these improvements may seem significant, they can dramatically decrease  home energy bills in the long run.Depending on the type of home  improvement or repair you undertake, you may also be able to claim a deduction  on your taxes. Before launching a significant home repair or improvement, it may  pay to consult with your tax accountant to see what, if any, portion of the cost  may be deductible. And, as you do home repairs throughout the year, keep  receipts and discuss the improvements and possible deductions with your  accountant when he or she is preparing your tax return.

Knowing  ahead of time which, if any, tax credits or deductions your home improvement may  qualify for can help you make a better decision about how to use credit to fund  the work. Since how you use credit affects your overall credit score, knowing  the cost of a project before starting it can help you better manage your  credit.

If you’re unsure how a home improvement project may  affect your credit score, websites like freecreditscore.com can help you  understand your credit. The site offers members a Credit  Score Estimator that can help you understand how big financial decisions,  like applying for a home improvement loan, may affect your credit score.

To learn more about tax credits for energy efficient home improvements,  visit http://www.EnergyStar.gov. To learn more about tax deductions, visit http://www.IRS.gov.  You can find a list of regional tax credits, rebates and savings at  energy.gov/savings.

Read more:  The Marietta Daily Journal – Tax credit and deduction tips for home improvement in 2012

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About Ryan&Real Estate

Born and raised in Fort Worth, after graduating high school I began my quest for self-employment. I started out in Cosmetology. Learning how to wrap, perm, color and cut. I began practicing, but with the crash of the economy my family and I had to move and I had to leave my beloved clients. After the slow rise of normalcy in day-to-day life, a career in real Estate fell in my lap. As I begin my new life as an agent, I'm constantly searching for more and more information, and what better way to share my findings, than by blogging about it? Enjoy!
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