I’m not usually a fan of forms or IRS info., but I find the energy tax credit form to be fascinating reading. Any qualified energy-saving installation or improvement made by December 31, 2007 will earn you varying degrees of tax credit on this year’s tax return. You’ll need to file Form 5695, available on the IRS website.
The credits can be hefty and are given for installing energy-efficient windows, exterior doors, insulation, metal roofs with thermal coatings to prevent heat buildup, heat-circulating furnace fans, new furnaces, high-efficiency central air conditioning, hot water tanks, and electricity-producing solar, fuel cell, and geo-thermal systems. Credits can even be applied to joint ventures with neighbors or other property owners and may also apply to second homes that are not primary residences. The key is to read the explanatory pages that accompany the form and check to see that your “energy property” complies. A manufacturer’s written certification of energy efficiency or an Energy Star label is satisfactory proof of compliance. Written certifications should not be attached to the form; you should keep them with your own tax records.
The “returns” on making your home more energy efficient are tremendous. In the short term, you could save money with your next tax return. In the long term, you’ll save money by using less energy for years to come.
Credit: Energy Improvements