We sat down with Alex Langmesser of Ehbed Energy on our weekly show Crypto Power Hour (live every Thursday on YouTube!) to discuss ways to take advantage of clean energy tax credits in the Inflation Reduction Act.
Here are 5 Clean Energy Tax Saving Tips that you can use today!
Tax credits allow you to subtract from the taxes you owe dollar-for-dollar, lowering your annual taxes! To make sure you get every penny you deserve, keep all your receipts in a safe location for up to 6 years.
1) ENERGY STAR-Certified Home Improvements
Converting your home’s exterior windows, doors, insulation, etc., to ENERGY STAR-certified products can help maintain a consistent temperature by reducing heat loss or gain.
Tax Credit Amount: 10% of costs, up to $500 (windows capped at $200)
2) Upgrading To Energy Efficient Appliances
If you’ve been living in your house for a while, there’s a chance it may be time to upgrade some of the appliances that you use every day!
Maybe it’s time to replace the pre-historic central A/C, or you could be on the market for a new water heater. Replacing them with new energy-efficient models can help you knock off a nice chunk of your annual taxes.
Tax Credit Amount:
$300 – Central A/C, Heat Pumps, Water Heaters
$150 – Gas, Propane, or Oil Water Boilers & Fans
$50 – Furnace Circulating Fans
3) Switch to Solar, Wind, or Geothermal Power
If you’re looking for a way to lower your monthly energy costs and annual taxes, renewable energy should be on your radar—now more than ever.
Installing a solar panel or wind turbine to help power your residence can help you see steep drops in your monthly energy costs.
Tax Credit Amount: 30% of installation costs
4) Purchase An Electric or Hybrid Vehicle
The number of gas-powered vehicles is slowly declining on American roadways. In fact, California will ban the sale of new gas vehicles beginning in 2035. If you’ve got a Tesla or Rivian on your wish list this year, then it may be worth the tax incentive!
Individuals who buy new “clean” vehicles can take advantage of the credit through 2032.
Tax Credit Amount: Up to $7,500
5) Stand-Alone Renewable Energy Systems
Nowadays, it’s not just doomsday preppers taking an interest in off-the-grid energy. For many, stand-alone storage plays an integral part in the transition to renewable energy, and more people are getting on board.
Stand-alone systems use a combination of techniques, such as fossil fuels and hybrid systems, to generate power and reduce costs. If you’re not ready to go fully solar yet, this is another option that still offers a tax incentive.
Tax Credit Amount: 30% of installation costs
Want To Learn More About Tax Credits? We Can Help!
The number of tax credits available to you may vary depending on the state you live in, but there are still tons of federal tax incentives that can save you a buck!
We highly recommend consulting with an experienced tax attorney to review the tax incentives applicable to you!
We’d be happy to help you with identifying potential tax credits, helping you file your taxes, or resolving any other disputes you may have with the IRS!
