How fresh tax credits, rebates can launch eco home updates
- Twitter: @annieanyway.RELATED LINKSInternal Revenue Service: Frequently asked questions about energy efficient home improvements and residential clean energy property credits https://www.irs.gov/pub/taxpros/fs-2022-40.pdfNorth Carolina Clean Energy Technology Center: Database of state incentives for renewables & efficiency https://www.dsireusa.org/NerdWallet: How to finance a home remodel https://bit.ly/nerdwallet-how-to-finance-a-home-remodel
- If you’ve been holding off on home improvements, a new law signed last year and now in effect as of Jan. 1, 2023, may provide a fresh incentive.The Inflation Reduction Act, or IRA, includes tax credits and rebates for homeowners who make energy-saving updates to their homes.
- Then work the savings into home improvement plans for this year and next, Saul Rinaldi says.FINANCING ENERGY-EFFICIENT HOME UPDATESThe cost of some home improvements could diminish the IRA tax incentives.
- If you have equity, consider a home equity loan or line of credit to finance larger updates, like new solar panels.
- For example, a $500 credit lowers your taxes owed by $500.The IRA allows homeowners a 30% tax credit for some energy-efficient updates, capped at $1,200 per year.
- An IRS fact sheet outlines eligible home improvements.Tax credits reduce your tax liability for the year, says Los Angeles-based certified public accountant Michael DiBernardo.
By ANNIE MILLERBERNDNerdWalletIf youve been holding off on home improvements, a new law signed last year and now in effect as of Jan. 1, 2023, may provide a fresh incentive.The Inflation Reduct [+4677 chars]