JACKSONVILLE, Fla. – 2013 is drawing to a close, but before you focus on new resolutions, you may want to complete one more project this year. If you make your home more energy efficient before December 31st, you could be eligible for a federal tax credit.
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.
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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:
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. (Read more here from the IRS.)
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).