Are you planning to make some home improvements this year? Well, the Inflation Reduction Act just passed by Congress is making your plans less expensive!

Baked into the legislation are certain tax credits that will ease your cost burden when you choose "green renovations" (energy-efficient alternatives) to improve your home. This includes things like installing solar panels, or replacing windows and doors.

We've seen tax incentives for making your home more energy-efficient in the past, but this bill expands those incentives profoundly— offering a $1,200 credit available for ten years. Additionally, for smaller projects like replacing your HVAC system or water heater, you can receive a $600 tax credit. That's stackable, by the way, meaning to could replace multiple appliances and receive the credit for each.

No matter what, when it comes to taxes, you definitely want to speak with a tax specialist to see how these incentives will work for you. It's especially important to understand what makes a tax credit different from a tax return. In order to receive the credit, you have to have tax liability (i.e. owe taxes). Essentially, the credit is applied to lower your liability dollar for dollar.

That's really good news, especially for those already planning to make improvements to their home in order to lower their burden of energy costs and promote cleaner energy. These kinds of improvements might also add value to your property in the future, as this legislation reflects a growing commitment to clean energy nation-wide.

If you have questions about how to add value to your home with energy-efficient improvements that save you money, please feel free to reach out!

Til next time,

Cassie Johnson

Key Realty - John Yoder Team