Going Green

 

            Due to recently passed legislation, we wanted to bring to your attention several tax breaks which can cut energy costs and reap you income tax savings.  All of these tax credits are available against regular and Alternative Minimum Tax (AMT), and none of them are subject to income phase-out limits designed to prevent you from benefiting from them.  So, no matter how high your income is in 2009 or 2010, you should be eligible to take advantage of these tax saving credits.

 

 

            A great way to cut energy costs and save up to $1,500 in federal income taxes is to make certain energy efficiency expenditures to your principal residence.  The credit, which is called the Non-Business Energy Property Credit, equals 30% of your expenditures (including labor costs for onsite preparation, assembly, or original installation) for:

 

The combined maximum credit for the years 2009 and 2010 is $1,500.  Even if you have claimed the previous $500 of non-business energy credits in 2006 and/or 2007, you are still eligible for this $1,500 credit.  This credit can be used to offset AMT in 2009 only, unless Congress grants an extension for 2010.

 

You can learn about qualifying energy efficient products at www.energystar.gov/taxcredits. Note that it is the manufacturer’s responsibility to apply to the IRS for the proper certifications, and according to the IRS, you can then rely on the manufacturer's certification.  You should keep a copy of this certification as part of your tax records.

                       

 

            Another way to cut energy costs and save on your federal income taxes is to install solar, wind, geothermal, or fuel cell energy saving equipment in 2009; you may be able to take advantage of the Residential Energy Efficient Property (REEP) credit.  The REEP credit equals 30% of your expenditures to install:

 

The REEP credit applies only to equipment you place in service in a residence located in the United States.  However, it cannot be claimed for equipment used to heat a swimming pool or hot tub.  Furthermore, the credit for fuel cell equipment is only available for your principal residence. The other credits apply to any residence, including vacation homes.

 

The credit is allowed for expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the residential energy efficient property, and for piping or wiring to interconnect the property to the dwelling unit.

 

The REEP credits are available to offset both regular tax and AMT.  Furthermore, any amount that exceeds your 2009 tax liability can be carried over to 2010.

 

 

The hybrid vehicle credit is available for purchases of new (not used) personal use vehicles, as well as new business vehicles.  However, any credit attributable to a personal-use hybrid that can’t be used in the year of purchase is lost—it cannot be carried over to future years.

 

 The amount of credit available depends upon the hybrid you buy; some of the most popular models are no longer eligible for the credit.

 

The maximum credit allowed is $3,400, but the actual credit allowed varies by vehicle.  Furthermore, the credit is phased out once a manufacturer sells 60,000 hybrid vehicles.  Since Lexus, Toyota, and Honda all hit this mark in previous years, no 2009 purchases of their hybrids qualify for this credit.

 

Ford and Mercury hit this 60,000 mark in the last quarter of 2008.  For purchases of their hybrid vehicles during the periods below, the following credit will be allowed:

 

If you are interested in obtaining more information about energy efficient expenditures, or if you have any questions regarding the energy efficient tax credits, please contact us at your convenience.

 

                                                                 

                                                                    Very truly yours,

                               

                                                                    SOUKUP BUSH & ASSOCIATES, P.C.