Time is running out for money-saving tax credits for home improvement and repairs

Time is running out on a federal tax credit that you could save you money on energy-efficient home improvements. Homeowners have until December 31, 2010 to buy qualifying items such as HVAC systems, water heaters, insulation, roofing, biomass stoves, windows and doors.

“If you’ve been putting off replacing your old heating and cooling system, for example, you should act before the end of the year,” says Angie Hicks, founder of Angie’s List, the nation’s leader in consumer reviews on local service companies. “A more energy-efficient model may cost more up front than a less efficient model, but you can recoup 30 percent of the cost through this tax credit, as well as the long term savings you’ll see in your energy bills.”

The credit is 30 percent of the cost of qualifying energy-efficient home improvements, up to a maximum credit of $1,500 for 2009 and 2010 combined. A tax credit is a dollar for dollar reduction on the amount of tax you owe.

“It’s important for homeowners to research the credits for home improvement products before buying,” adds Hicks. “Each item has its own requirements in order to qualify. For example, materials and labor are included in the tax credit for a biomass stove, but for insulation, its materials only. And new construction and rentals are not eligible for the credit”

Hicks also advises homeowners owners to save receipts and the signed statement from the manufacturer certifying the product qualifies for the tax credit with your records for tax time.

7 Money Saving Tax Credits:

1. HVAC Systems: Heating and cooling account for more than half the energy used in a typical home. If your heating or cooling unit is more than 10 years old, and you have had substantial repair costs, it may be a good time to think about replacing.
    
2. Biomass Stoves: Biomass stoves burn renewable sources to heat a home or heat water. The stoves burn pellets made from wood, corn, straw and other agricultural resources. Many new stoves come with EPA-approved standards that burn off most of the polluting gases and increase your stove’s efficiency by as much as 10 percent.
    
3. Insulation: A home should we well-insulated, from the roof to its foundation. If not, it could easily lose nearly half of its heating and cooling energy. How to tell if you need insulation? Look in your attic for exposed 2-by-4’s. For the walls, find a spot, preferably in the closet where it’s not seen, and make a small puncture hole with a wire. You should feel resistance and insulation. It’s a good idea to have an energy audit done to determine areas in need of insulation.
    
4. Water Heaters: Water heating can account for up to a quarter of the energy consumed in your home. Maintained properly, water heaters will last for years and deliver gallon after gallon of hot water. But if your water heater is more than ten years old, it’s probably operating at less than 50 percent of its efficiency.
    
5. Roofing: Industry experts say qualified roof products reflect more of the sun’s rays; lowering the roof surface temperature by up to 100F, thus decreasing the amount of heat transferred you’re your home. Curling, crackling and blistering of the shingles and/or a leaky roof are indicators that you need a new roof.
    
6. Windows: By replacing your windows you can expect a return on your investment of at least 80 percent. If you notice condensation and drafts on and around your windows, or rotting or warping frames, you might be in need of an upgrade.
    
7. Doors: The front door is a great way to increase curb appeal, and today’s styles are more energy efficient. If your door is 15 years or older, splitting, or cracking – then it’s likely time to replace.

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