Going Green Could Pay Off...Literally

We have finally reached the point where being environmentally friendly is trendy. Well, there is now another reason to jump on the bandwagon and go green: money. It would appear that being environmentally minded could save you a couple hundred or a few thousand dollars come tax time.

If you've made energy-saving improvements to your life in the past year, you may get some tax credits on your federal and/or state income taxes.

Let’s start with automobiles. The federal government is now giving you credit off your income tax when you purchase a fuel-efficient hybrid. The specific amount you earn will actually depend on the hybrid you bought. You can reference this IRS chart to find your vehicle. And to think that you bought that hybrid simply to save gas and pollute less. Well, now there’s a tax break in it for you as well.

And the tax break doesn’t stop at the federal level. There are some states that give you a tax break for buying a hybrid car as well. If you have questions regarding what incentives your state might provide, the Department of Energy keeps a database of state incentives and laws related to alternative-fuel vehicles.

The other big area where you might be able to take advantage of a tax break is home energy. Making your house more efficient saves money on your utility bills in the long run, and now can earn you some cash during tax season.

If you upgraded your home's insulation, windows, doors, metal roof, water heater, or heating or cooling system in 2007, you may get a credit of up to $500 off your taxes. The new items have to meet energy-efficiency codes -- this Energy Star chart shows what qualifies.

If you decided to go solar and install solar panels and/or solar water heaters in your home, you are looking at a bigger tax break that could earn you a credit of up to $2,000 off your taxes from the federal government. As far as the state income tax return, many states now offer an array of tax deductions for adding solar energy to your home. The Database of State Incentives for Renewable Energy lists tons of credits, rebates, grants, and more ways to cut the cost of green power.

There are 101 reasons to go green and save our planet. Why shouldn’t money be one of them?

Cheers!
-Taxus

Free Money in '08?

Well, nothings really free. There's no free lunch remember? But although it comes from somewhere, the important point is that it comes to your wallet.

The specifics

In order to stimulate a waning economy, the government is proposing a tax rebate. The rebate is being issued in hopes that people will spend the money and breathe some life into the economy. Whether this happens or not or whether an actual plan is decided on remains to be seen. But let's get to what the rebate means to you.


Senate Version

$500 per Individual
$1,000 per Joint return
$300 per Child
And there is no limit on income


Congress Version

$600 per Individual
$1,200 per Joint return
$300 per Child
Limitations: Filers must have more than $300 in Adjusted Gross Income and there will be a 5 cent deduction in the rebate per $1 over an AGI of 75K for individuals and $150K for joint filers.


**And if you have tax debt, don't get excited. That rebate money goes to the government!**


But It's January!

If you're worried the Senate and House won't get their act together until it's too late, don't worry. In 2001 when this was done Bush signed the dotted line and 4 months later the checks was given out--this would mean if the bill is signed during February, the money would come out in June. Not that bad...



Additional Resources...

Is a Tax Rebate Coming Your Way??

Bush Calls For 'Direct and Rapid Stimulus'

Tax Rebates: Where's Your Check?