Energy Credits

Today TaxMama hears from Penny in Wichita, Kansas, who has an excellent question. “If someone wants to take advantage of the tax credits being offered for energy efficient projects at home (like replacing a furnace or AC unit), how do they do that? “

Hi Penny,

Well, here’s IRS’s recent announcement about the items that are eligible for energy credits:
http://www.irs.gov/newsroom/article/0,,id=153397,00.html

It describes the kinds of improvements for which IRS will permit a credit, like insulation or double-paned windows – up to $500. Also, there’s a $2,000 incentive for solar panels.

Now wouldn’t you like to know what forms or paperwork you need in order to claim the credits?

Use Form 3468 to report the total expenditures. http://www.irs.gov/pub/irs-pdf/f3468.pdf

But be sure to get copies of all receipts and paperwork to prove that you had the work done, or bought the appropriate component. Often people selling energy credit-eligible products will have paperwork.

Incidentally, check to see if your state or city offer any credits for these installations, too. Often, you will find local subsidies in addition to the funds from IRS.

And remember, you’ll find answers to questions about energy credits and all kinds of tax issues, free. Where? Where else? At TaxMama.com

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