by Dave Logan
In January, we told you about tax credits for several energy-efficiency improvements you can make to your home this year. If you are a homeowner, you are eligible for a tax credit of up to $1500 for 30% of the costs of approved energy-efficiency improvements. Today, I want to focus specifically on tax credits for insulation.
What is the tax credit worth? For example, if you spend $1,000 on new qualifying insulation, you are eligible for a $300 Federal tax credit, which is a better credit than the previous tax credit of up to $500 for 10% of the costs.
It’s important to remember that only the cost of the insulation products is eligible for the tax credit. You will still have to pay for installation. Given you’ll be ahead on the tax break, however, I think it’s the best idea to hire a professional contractor to ensure proper and safe installation. Make sure you get an itemized receipt for the IRS showing only the material costs.
The tax credit itself applies only to the perimeter of the home that separates the living space from the outside: walls, attics, foundations, crawl spaces, and basements. To take advantage of the tax credit, you will need to get your insulation installed by December 31, 2010.
Here’s what you will need:
1. Form 5695 submitted to the IRS. 2. Itemized receipt for materials from your professional contractor. 3. Manufacturer’s certification document from the insulation manufacturer.
Once you have all of the above put together, you will turn all of it in to the IRS. Your professional contractor and the IRS can help you with any questions in the meantime. It’s still early, so get that insulation project on the calendar and take advantage of a good tax credit.
For more helpful information on these and other home improvement projects, check in often with the TDL Blog. And don’t forget to visit TeamDaveLogan.com to find a trusted home improvement professional to help you with your next project!