As concern for the environment continues to grow, more and more people are looking for ways to reduce their carbon footprint and make eco-friendly choices. One area where this is particularly important is in the home, where energy usage can have a significant impact on both the environment and your wallet. That's why the IRS is now offering expanded home energy tax credits for those who make environmentally-friendly upgrades to their homes.
As announced in IR-2023-97 on May 4, 2023, taxpayers who make qualifying improvements to their homes can now receive a tax credit of up to 30% of the cost of the upgrade, up to a maximum credit of $1,500. This is an increase from the previous maximum credit of $500, making it an even more attractive opportunity for those looking to save money and reduce their environmental impact.
So, what types of upgrades qualify for these expanded tax credits? The list is extensive and includes everything from solar panels and geothermal heat pumps to energy-efficient windows and doors. Even smaller upgrades such as insulation and sealing air leaks can make a difference and qualify for the credit. Check out Energy.gov for detailed and helpful list.
To take advantage of this opportunity, you'll need to make sure that the upgrades you're considering meet the IRS's criteria for energy efficiency. You'll also need to keep detailed records of the cost of the upgrades, as well as any associated expenses such as installation fees.
It's important to note that while this tax credit is certainly generous, it won't last forever. As of now, it's set to expire at the end of 2032, so if you're considering making energy-efficient upgrades to your home, now is the time to act.
In addition to the financial benefits of these tax credits, there are also numerous environmental benefits to making your home more energy-efficient. By reducing your energy usage, you'll be doing your part to help combat climate change and reduce your carbon footprint. Plus, you'll likely see a reduction in your monthly energy bills, which is always a welcome bonus.
Overall, the expanded home energy tax credits offered by the IRS are a great opportunity for those looking to make environmentally-friendly upgrades to their homes. Whether you're looking to install solar panels or simply improve your home's insulation, this tax credit could make a significant difference in both your wallet and the environment.
In addition to the benefits of reducing next year's tax bill, these expanded home energy tax credits could also be a way to mitigate any pesky old tax debt you may have. By taking advantage of these credits, you may be able to reduce the amount you owe the IRS and make it easier to pay off any outstanding debts.
Of course, if you're struggling with paying off old tax debt, it's important to prioritize taking care of that debt first. The IRS offers a number of options for those who are unable to pay their taxes in full, including installment agreements and offers in compromise. If you're struggling with tax debt, it's important to reach out to a qualified tax professional who can help you navigate these options and find a solution that works for your unique situation.
In the meantime, if you're interested in taking advantage of these expanded home energy tax credits, there are a few steps you can take to get started. First, consider having an energy audit performed on your home to identify areas where you could make improvements. From there, you can research the types of upgrades that qualify for the tax credit and start gathering quotes from contractors.
Remember, the expanded home energy tax credits are set to expire at the end of 2032, so if you're considering making upgrades to your home, now is the time to be strategic about taking advantage of this provision. And if you're struggling with tax debt, don't hesitate to reach out for help. With the right plan in place, you can take control of your finances and start making progress towards a debt-free future. Reach out to us today!
