Six Ways to Save on Taxes and Go Green

It's March 15th--that's 30 days and counting until tax day--April 15th. Have you completed your tax return? In case you have procrastinated and are only thinking about the green for upcoming St. Patrick's Day, you may not have to be leprechaun lucky to get some green back.

The new economic stimulus package bill, footed by you the American taxpayer, may have some direct benefit to you.

1. $500 for energy efficiency
It was a record frigid winter this year in northern states. If you waited until after Jan. 1 to install new insulation, energy-efficient windows or an energy-efficient furnace, boiler or air conditioner,
a tax credit of up to $500 that expired in 2007 has been renewed for 2009. It covers up to 10% of the cost of a range of projects that meet certain specifications.

Do $5,000 worth of qualifying work, and you not only get a $500 rebate, but also savings on energy bills for years to come. There's still time as many parts of the U.S. faced repeated winter storms and heavy snow. Why wait? Global warming has boiled summer time weather to new extreme. It could be a sweltering summer despite the bitter cold winter.

Also note these important limits, which cap the amount you can claim for any particular project:- Windows: $200- Exterior doors, roofing or insulation: $500- Most heating, ventilation and air-conditioning improvements: $300- Furnaces or hot water heaters: $150

Remember, your overall tax credit is capped at $500, so if you install $5,000 worth of exterior doors and $2,000 worth of new windows, for a total of $7,000, you can still only claim $500 - even though 10 percent of all qualifying work equals $700. Also, the tax credit applies only to equipment, not labor.

Find more information at the Alliance to Save Energy or Energy Star or Department of Energy Web sites. Note that much of this information reflects the tax incentives in place in 2006 and 2007; for the most part, the 2009 tax credits are identical, but updated criteria for which products qualify, for instance, will be published soon.

2. $2,000 for geothermal
The new tax breaks include a new incentive to install ground-source heat pumps, according to Alliance to Save Energy.

The old credits had been capped at $300 and were included under the overall energy efficiency improvement cap of $500. No longer. Now you can claim up to $2,000 of the cost of installing a geothermal heating and cooling system, and the cost is separated completely from other energy-efficiency improvements you might claim. Like the energy-efficient tax breaks, however, this incentive doesn't apply to work done in 2008.

Ground-source heat pumps are installed underground and use the constant 50-degree subsurface temperature to cool air or water in the summer, and heat it in the winter - both of which reduce the cost of heating or cooling year round.

3. $2,000 or more for solar power systems
The bill extends for another eight years a tax credit that covers 30 percent of the cost of new photovoltaic solar power systems on homes.

The existing tax credit, which was capped at $2,000, would have expired at the end of 2008. Now, it's good through 2016 - and there's no longer a dollar cap on the 30 percent rebate.

4. $500 or more for a fuel cell or microturbine
The tax incentive that had covered 30 percent of the cost of fuel cell or microturbine systems in homes, which lapsed in 2008, has been restored for 2009 and through 2016. It covers up to $500 per 0.5 kw of capacity.

5. $7,500 for plug-in hybrid cars
Are thinking of taking advantage of the great deals on new cars sales and buying a Mini Cooper or Smart Car? Hold your racing horses! Consider a hybrid. The first 250,000 buyers of plug-in hybrid vehicles now qualify for a $7,500 tax rebate. A similar tax credit for hybrid vehicles had been capped at $3,500.

6. Wildcard
Keep an eye out for new incentives from your state, since the bill also authorizes an $800 million government bond program that encourages states to create incentives for new and existing energy conservation and related programs. Some of that money may be earmarked toward state tax breaks and other incentives that will vary by location.

"Do you have people?"
If you're unsure who to turn to for your tax return, especially if you have invested in any energy-efficient products, email me and I will refer you to the best tax expert I know! "I'll contact my people". christine.michaels@yahoo.com