As home builders we talk about energy efficiency all the time; you read about it in the news; you hear it on the TV. But the topic of energy efficiency is more complex than you might think (to see the differences in cost for new construction homes and resale homes read more here).
The most familiar efficiency standard is set by Energy STAR. They are “a U.S. Environmental Protection Agency (EPA) voluntary program that helps businesses and individuals save money and protect our climate through superior energy efficiency…Now in its 20th year, the ENERGY STAR program has boosted the adoption of energy efficient products, practices, and services through valuable partnerships, objective measurement tools, and consumer education” (read more).
If you know Energy STAR you probably know what you need to in order to size up your house for efficiency. And while we know energy efficiency means lower bills, many of us also want to ensure it translates into tax relief as well. The IRS has expanded its credits for homeowners based on Energy STAR standards as part of the American Recovery and Reinvestment Act of 2009.
These are the relevant deductions you have plenty of time to prepare for for your 2014 taxes next year:
1. Residential Energy Property Credit This tax credit is for homeowners who make qualified energy efficient improvements to their existing homes. The credit applies to improvements such as adding insulation, energy efficient exterior windows and energy-efficient heating and air conditioning systems.
2. Residential Energy Efficient Property Credit This tax credit will help individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, solar electricity equipment and wind turbines.
The benefit for our clients is that Stackman Custom Homes builds all their homes with these standards already in mind, as do our subcontractors. However, owners of resale homes can also benefit greatly by ensuring they update their home. If you’re wondering what your home’s energy score is so you can consider deductions this year, click below to take a quiz: