Today TaxMama hears from Seth in the TaxQuips Forum, who wants to get credit for his work. “I got an $8,000 tax credit on my 2009 taxes for being a first time home buyer. I spent quite a bit of money insulating my house at the end of 2010. My Dad told me that the total amount of tax credits that I can have for 2009 and 2010 is $1,500. This means that I would not get a tax credit for 30% of my cost to insulate my house. Is that true?”
Your dad is right. Father does know best. The TOTAL residential energy credit is $1,500 – once per home. Unfortunately, it’s not an annual limit.
So if you used it last year, you don’t also get it in 2010. We all know it’s nowhere close to the cost to make the home more energy efficient. But the credit is higher than it used to be, and not tied to specific limits for different improvements, like it used to be.
At least your utility bills will be less in the long run. Your house will be more comfortable, with more stable temperatures, during periods of extreme heat and cold. And if you did it right, your home will be better soundproofed – and less susceptible to vermin – like termites, and other things that eat your house.
Bear in mind, you CAN get this credit in addition to the first-time homebuyer’s credit. Getting that credit doesn’t prevent you from getting the residential energy credit, too. Enjoy your home!
And remember, you can find answers to all kinds of questions about tax credits and other tax issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
Please post all Comments and Replies in the new TaxQuips Forum .