August 3, 2021
Back in December of 2017, the Tax Cuts and Jobs Act (TCJA) was passed, thus bringing about substantial changes to the kinds of tax deductions a homeowner can make. But, did you know you can also receive government tax credits and manufacturer rebates for certain appliances, electronics, home improvements, remodels, and more? Whether an existing home or new construction, you may qualify for some homeowner tax rebates and relief incentives under certain conditions.
There are several types of tax credits and relief you can take advantage of just for being a homeowner, from mortgage interest deductions and property tax credits to deductions for mortgage insurance, and much more. However, if you choose to implement certain home renovations, remodels, or energy upgrades, you could possibly qualify for additional tax credits and rebates. Roofing, space conversions, and renewable energy sources are just a few examples of the home remodels that can deliver a wide range of financial benefits for you.
Tax credits are regulated and set by the government and intended to entice homeowners to make improvements that conserve energy. Local, state, and federal tax credits exist for those who qualify, and are claimed during income tax season. If you have your roof replaced with an Energy Star-certified material, such as asphalt shingles, you could receive a tax credit of 10% of the cost, up to $500.
By adding an office space to your home as a legitimate business owner, you may also qualify for a home office deduction, which would allow you to deduct 100 percent of the total cost to make this addition or remodel. For a dedicated office space, you could also receive certain manufacturer rebates on office furniture and equipment. To discover which tax credits are available to you, go to the U.S. Department of Energy website.
Under the Consolidated Appropriations Act of 2021, a Residential Renewable Energy Tax Credit is available for homeowners who remodel areas of their property with residential renewable energy products, such as solar paneling for roofs, wind turbines, geothermal heat pumps, solar water heaters, biomass fuel stoves, and more. Act fast, as these tax credits expire December 31, 2023.
If you install an energy-efficient appliance that is administered through a local utility company or an appliance manufacturer that works alongside the U.S. Energy Star program, you could receive a rebate from either party. Some local power companies have been known to offer rebates as high as $500 or $600 for Energy Star-certified installations.
Appliances must be Energy Star-Certified to be eligible for the rebate. Examples of appliances that make Energy Star-certified models include HVAC systems, home electronics, lighting, water heaters, refrigerators, freezers, dishwashers, washing machines, dehumidifiers, and air purifiers. Home improvement rebates may also be available for projects like windows, doors, skylights, insulation.
Are you interested in learning more about managing your individual or multi-state taxes? Contact Aspire CPA at (317) 469-4500, or email us directly at email@example.com to speak with a licensed CPA about Individual tax planning and preparation services in Indianapolis, Indiana.
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