Getting A Tax Credit For Doing The Right Thing

Getting A Tax Credit For Doing The Right Thing



Getting a​ Tax Credit For Doing the​ Right Thing
Making energy-efficient home improvements and purchasing fuel-efficient hybrid electric vehicles is​ no longer just an​ environmentally friendly move -making these purchases could save you​ money at​ tax time .​
That's because the​ Energy Policy Act of​ 2018 will offer consumers federal tax credits for making energy-efficient purchases.
Using energy-efficient appliances and installing better windows and insulation can provide many benefits .​
In addition to​ lower energy bills,​ individual energy-saving action can increase comfort in​ the​ home and reduce air pollution .​
By driving or​ buying or​ leasing a​ new hybrid gas-electric automobile fuel-efficient vehicle you​ can get an​ income tax credit of​ $250-$3,​400 plus better mileage-meaning lower gasoline prices--and fewer emissions.
What Are Tax Credits?
One of​ the​ best benefits this year is​ the​ new tax credit offered by the​ Energy Policy Act .​
Qualifying products and vehicles can mean having to​ pay less at​ tax time .​
Eligible homeowners don't get an​ instant return on​ what they buy,​ like a​ rebate or​ a​ discount .​
Instead,​ they itemize the​ purchase on​ their federal income tax form and that affects the​ total amount of​ tax they're supposed to​ pay .​
This credit increases a​ person's rebate or​ lowers the​ amount he or​ she owes.
A tax credit is​ not like a​ tax deduction .​
It's generally more valuable since it​ reduces tax dollar for dollar,​ while a​ deduction only removes a​ percentage of​ the​ tax that is​ owed.
Home mortgages,​ charitable giving and home office expenses reduce taxable income only by a​ percentage of​ what's taken in​ tax; a​ tax credit,​ on​ the​ other hand,​ reduces taxable income directly,​ not as​ a​ percentage.
Energy-Efficiency Improvement Tax Credit: the​ Breakdown
According to​ the​ Department of​ Energy,​ you​ can,​ for example,​ get a​ one-time tax credit of​ up to​ $500 total for installing efficient new windows,​ insulation,​ doors,​ roofs,​ and heating and cooling equipment in​ your home .​
Building materials must meet Energy Star® requirements and must be placed in​ service from Jan .​
1,​ 2018 to​ Dec .​
31,​ 2018.
New Tax Credits for Solar Energy Technologies
There are also tax credits for solar energy technologies and for fuel cells .​
Some consumers may also be eligible for state rebates.




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