|
|
|
Credits vs. Deductions
|
|
|
In general, tax credits are more valuable than tax deductions.
Credits reduce the amount of taxes you owe dollar-for-dollar.
Deductions lower your taxable income.
|
|
|
For example:
If you are in the 25% tax bracket, a $100 deduction lowers your tax payment by 25% of the deduction, or $25.
A tax credit reduces your taxes by the full $100.
|
|
|
|
Loading
|
|
Tax Incentives - Home Energy-Saving Investments:
Lower Your Utility Bills and Benefit the Planet
Government incentives can help homeowners invest in smart, affordable, energy-efficient and renewable energy improvements in their homes. The latest Federal measure, the American Recovery and Reinvestment Act of 2009, modified past laws, strengthened efficiency standards, and provided additional tax incentives in 2009 and 2010 to help homeowners take meaningful steps toward lower monthly energy bills and a more affordable, sustainable future.
The typical U.S. family spends more than $2,000 every year on home utility bills. Residential consumers who take advantage of these incentives can reduce their energy expenses and enhance the long-term value of their homes. Energy-saving home investments also cut carbon emissions that contribute to global climate change, reducing the need for new power plants.
Homeowners should consult a tax professional for specific guidance on energy-efficient and renewable energy investments that may qualify for the tax credit.
For information on tax credits, please see:
www.energystar.gov/taxcredits
Note* Be sure the efficient product you choose to purchase and install is on the list for a tax credit. Although there are thousands of ENERGY STAR® qualified products providing energy and money savings, tax credits are only available for a limited number of products with the highest efficiency levels and which typically cost much more than standard products.
|
|