One of the things I’ll need to do in the next year or two is replace the windows on my brand-spanking (to me) house, which is a few hundred bucks a pop. At eight windows, that’s a lot of hundred bucks. So when I read about Sandra Block’s (personal finance writer for USA Today) article about the new energy bill and how it affects me, I smiled (only a little). She explains how the new energy bill gives [small] tax breaks for “energy-saving home improvements!” Specifically, you get a tax credit of 10% of the cost of the improvement (lifetime cap of $500), so this could come in handy. The article also has energy saving tips (many are common sense) that might come in handy.
The new energy bill gives a tax credit which goes straight to your pocket, as opposed to a deduction which just reduces your taxable income. So if you get a $100 deduction, you only get back a fraction of that depending on what your tax bracket is. If you get a $100 tax credit, you get a newly minted Ben Frankling (well, a check, but you get the idea).
You must make the improvement between 12/31/2005 and 1/1/2008 and here are valid upgrades:
- Insulation that reduces loss of heat or AC.
- New exterior windows (capped at $200, boo!)
- “Highly efficient” central AC, heat pump, or water heater (capped at $300)
- “Highly efficient” furnace or boiler (capped at $150)
- Solar-powered hot-water systems: You can get credit for 20% of the cost (capped at $2,000)
She also mentions getting your home “energy rated” which is something I’d never heard of before – reputable ones (i.e. certified) are on this list and they run up to $450!
Here are their energy saving tips:
- Replace higher wattage bulbs with lower bulbs: I have a lot of fixtures with multiple bulbs, I just twist off a few of them because usually they’re too bright anyway with them all on.
- Use ceiling fans
- Clean/replace AC filters monthly: I didn’t realize you had to do it this often, but when I checked my filter was all clogged up. They only run a little more than a dollar a piece but I might go with a cleanable one in the future.
- Install programmable thermostat: Having one of these is awesome because I never liked the idea of running the AC or heat when no one was going to be home all day, it feels like a huge waste.
- Close and open blinds/shades based on the season (open for winter, closed for summer)
- Caulk and weather-strip doors: This is huge, I could hear air coming in and out of windows and doors before I caulked them this past weekend. Plus, this prevents bugs from crawling into your house too.
- Use sleep features on computers or leave them off.