As a result of the American Recovery and Reinvestment Act of 2009 (see our roundup of ways to take advantage), 2009 and 2010 are good years to make some of the “green” home improvements you may’ve been considering. I’ve had a little trouble, however, navigating and understanding the many tables and footnotes, so I’m condensing the basics here for our mutual benefit.
Tax Credits for Smaller Improvements
I’m sure we all wish we had geothermal energy and solar roofs and that we were selling our unused energy back to the electric company, but installing those things is still a huge initial investment. Here are the more likely things we can do in the meantime, and get a special benefit when it comes time to do our taxes, not to mention saving money on monthly electricity bills.
Get back 30% of the cost of any of the following. You can implement any combination of this list, but your total tax credit won’t exceed $1,500. Also noteworthy: these don’t apply to building a new house (there are separate tax credits for new home builders as well as commercial buildings and cars).
Be Prepared and Pay for the Right Things
Don’t get caught without the right equipment or paperwork. Here’s what you need to do in order to benefit for the next two tax seasons.
- Equipment must be able to last for at least five years – a two-year warranty is sufficient to prove this.
- Not every equipment model qualifies – and if it was placed in service before Feb. 17 2009, the qualifications are different. Click an option in the list above for more.
- Save your receipts and warranty
- Improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010) — use IRS Tax Form 5695 (2009 version) — it will be available late 2009 or early 2010
Our financial crisis is being combated on many sides, with a seemingly endless series of opportunities for people facing serious hardships. I thought it would be helpful to summarize all the options created as a result of the American Recovery and Reinvestment Act of 2009 and give you just the facts that you need in order to consider pursuing one or more of them.
1. Mortgage Refinancing and Modification
You may be having trouble making mortgage payments (either your rate went up significantly, or your income decreased, or maybe both), or you’ve been paying your mortgage on time but your home value has decreased, so you can’t take advantage of lower interest rates. Help is available for both groups.
Visit MakingHomeAffordable.gov, and find out if you are eligible.
Also worth pointing out on that site is the special Beware of Scams page. The idea of losing your home is one of the more frightening ones I can think of. People may not always make sound decisions.
Earlier coverage of this from Consumerism Commentary
2. Tax Reduction for 95% of Working Americans
You don’t have to take any action to benefit from this. You’ll either notice your regular paycheck increasing, or you won’t.
Earlier coverage of this from Consumerism Commentary
3. $250 for SSI or Social Security Recipients
There’s a one-time payment of $250 that should be made by the end of May 2009 for people on Social Security, a veteran with a pension, or people with disabilities. You don’t have to do anything special to receive this, either. More information at Social Security Online.
4. Tax Credits for Making Energy Efficiency Improvements
The Low Impact Living blog has a great summary of the different ways you can save in 2009 by making specific “green” improvements. I’m seriously considering a few of these.
5. Over $15 Billion for Medicaid
I don’t know much about Medicaid, except that many people rely on it, and if you were worried that you wouldn’t be covered, there’s a good chance you will be, now. Read the Press Release at the White House.
6. Tax Credits for Buying a House
There was a tax credit for buying a house last year, and there’s a tax credit for this year. They have different rules and Flexo did a great job explaining both, and how to act on either one.
7. Tax Deduction for Buying a Car
Trucks are included, too. If your income isn’t too high (taxable income of $125,000 / year or $250k for couples filing jointly), you can deduct the sales tax on a new vehicle. Read more (especially the first comment) at the Sound Money Matters blog.
8. More Money for Students
An additional $17.1 billion in Pell Grants means an increase of a maximum Pell award from $4,850 to $5,350. There’s also an additional $200 million for work study programs. Quite a lot more information at the U.S. Department of Education Web site.
More details about this, additional credits and 529 plans can be found at the Online Education Blog.
Summary
Whether you think the ARRA is a good idea or not, it’d be foolish not to take advantage of the opportunities that make sense for you and/or your family. Mostly, though, I hope the growth of our various tent cities slows down really soon.
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