To qualify for the tax credits — which reimburse homeowners 10 percent of the cost of an Energy Star-qualifying home improvement project, up to $500 — the improvement must have been made in 2012 or 2013.
Here’s a list of products and appliances that may qualify for a tax credit, but keep in mind that the total credit can’t exceed $500:
1. HVAC Systems: Heating and cooling account for more than half the energy used in a typical home. If your heating or cooling unit is more than 10 years old, and you have had substantial repair costs, it may be a good time to think about replacing.
2. Insulation: A home should we well-insulated, from the roof to its foundation. If not, it could easily lose nearly half of its heating and cooling energy. How to tell if you need insulation? Look in your attic for exposed 2-by-4’s. For the walls, find a spot, preferably in the closet where it’s not seen, and make a small puncture hole with a wire. You should feel resistance and insulation. It’s a good idea to have an energy audit done to determine areas in need of insulation.
3. Water Heaters: Water heating can account for up to a quarter of the energy consumed in your home. Maintained properly, water heaters will last for years and deliver gallon after gallon of hot water. But if your water heater is more than ten years old, it’s probably operating at less than 50 percent of its efficiency.
4. Roofing: Industry experts say qualified roof products reflect more of the sun’s rays; lowering the roof surface temperature by up to 100F, thus decreasing the amount of heat transferred you’re your home. Curling, crackling and blistering of the shingles and/or a leaky roof are indicators that you need a new roof.
5. Windows: By replacing your windows you can expect a return on your investment of at least 80 percent. If you notice condensation and drafts on and around your windows, or rotting or warping frames, you might be in need of an upgrade.
6. Doors: The front door is a great way to increase curb appeal, and today’s styles are more energy efficient. If your door is 15 years or older, splitting, or cracking – then it’s likely time to replace.
7. Biomass Stoves: Biomass stoves burn renewable sources to heat a home or heat water. The stoves burn pellets made from wood, corn, straw and other agricultural resources. Many new stoves come with EPA-approved standards that burn off most of the polluting gases and increase your stove’s efficiency by as much as 10 percent.
Taxpayers who took advantage of the full original tax credits from 2006 to 2011 are not eligible for the entire credit. However, if you only used $200 of the credit during that time period, you would still be eligible for $300 this time around.
In order to receive the tax credit for various home improvement projects, the work must have been done in 2013 and it must be claimed on the 2013 federal income tax form, which is due to be filed by April 15, 2014.
Angie’s List Tips:
It pays to do your research: It’s important for homeowners to research the credits for home improvement products before buying. Each item has its own requirements in order to qualify. For example, the tax credit for insulation does not include installation costs. Don’t rely solely on the company doing the installation, also check with your tax consultant.
Save for tax time: Save any receipts for your records. Consumers can claim the credit on IRS form 5695. You should receive a signed statement from the manufacturer certifying the product qualifies for the tax credit. Keep this with your records for tax time.
Look for other ways to save: Check around for rebates. Various localities and utility companies offer assistance as well.
Home Energy Audits
A home energy auditor can comprehensively assess how much energy your home uses and evaluate the measures you can take to improve its efficiency.
How does it work? Professional auditors can offer non-invasive scientific testing to determine which areas of the home are not efficient. The most common test is a blower door test, in which a doorway seal and fan measure a home's air exchange rate to detect leaks. Another test, called a thermographic scan, uses infrared technology to determine over- or under-insulated areas. A good auditor should do a room-by-room examination, as well as a thorough check of past utility bills.
Be present: If possible, try to be present at the time of the audit. Make a list of any existing problems for the auditor, like drafty rooms or visible condensation. Walk through your home with the auditor during the test and ask questions.
What happens after an audit? The auditor should give you a list of recommendations for cost-effective energy improvements to enhance your comfort and safety. Some common recommendations include sealing air leaks, sealing ductwork and adding insulation. You might be advised to consider upgrading lighting and appliances, especially if they’re older and not as efficient as newer equipment.
Costs & Time: Although the scope of an energy audit often depends on a home’s age, size and its design, a typical professional audit takes about three to four hours to complete and costs $250 to $800.
Hiring an auditor: Some auditors offer to sell other products and services, posing a potential conflict of interest. An auditor should be able to provide proof of experience, education and applicable certification. Seek auditors certified by Residential Energy Services Network (RESNET) or the Building Performance Institute (BPI).
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