Some Have Expired, Others Still Good
Over the past few years, the federal government has offered tax credits for certain home improvements aimed at increasing a home's energy efficiency. Unfortunately, the most popular and generous tax credits, which allowed you to claim up to 30 percent of improvements such as a new roof or hot water heater, have expired. You can still get credit, though, for other significant energy-efficient improvements.
According to EnergyStar.gov, you can claim a tax credit for 30 percent of the cost of installing a geothermal heat pump, a small wind turbine or a solar energy system in your home. The credit has no upper limit and applies to both existing homes and new construction, but not to rental properties.
You also can get a credit of up to 30 percent of the cost of residential fuel cells, up to $500 per .5kW of power capacity, EnergyStar.gov says. All of these credits remain good through Dec. 31, 2016.
While the initial cost of these improvements may seem significant, they can dramatically decrease home energy bills in the long run.
Tax-deductible Improvements
Depending on the type of home improvement or repair you undertake, you may also be able to claim a deduction on your taxes. Before launching a significant project along this line, consult with your tax accountant to see what, if any, portion of the cost may be deductible. As you do home repairs throughout the year, keep the receipts. Then discuss the improvements and possible deductions with your accountant when he or she is preparing your 2012 tax return.
