Are you a homeowner looking for ways to save money on your household expenses and reduce your taxes? Are you tired of high energy bills? Do you want to make a personal contribution to improving our energy-star-tax-credit_clip_image001environment? You can go green and save on your tax bill at the same time by replacing energy wasting products in your home with energy efficient products.

 

The average American household spends $2200 a year on energy bills. You can reduce that bill by at least 30 percent per year when you buy energy efficient products. You also will qualify for a 30 percent tax credit on energy efficient household products until 2016.

 

As long as you buy products that are rated and approved by the government sponsored program ENERGYSTAR you can reduce your taxes by qualifying for the energy savings tax credit and begin saving money on your energy bill.

 

So what makes a product qualify for the ENERGY STAR rating? They must meet strict energy efficient criteria set by the US Environmental Protection Agency or the US Department of Energy. These products are the same or better than standard products but use less energy.

 

Note: you must be a homeowner to qualify for the tax credits. Renters are not eligible for any of the tax credits.

 

The following ENERGYSTAR rated items fall under the 30 percent tax credit until 2016: 

 

  • Fuel Cells

  • Solar Water Heaters

  • Solar Panels

  • Wind Energy Systems

  • Geothermal Heat Pumps

 

In 2010 specific household energy efficient products and/or home improvements that fall under the ENERGYSTAR rating will also qualify for the 30 percent tax credit but have a $1500 limit per year. Some of these products include:

 

  • Water Heaters (Electric / Gas)

  • Windows and Doors

  • Insulation

  • Metal and Asphalt roofing material

  • HVAC

  • Biomass stoves

 

If you drive to work everyday then consider purchasing a hybrid gasoline electric, diesel, battery-electric, alternative fuel, fuel cell or plug-in hybrid electric vehicle. You will qualify for a tax credit based on a formula that calculates the vehicle weight, technology and fuel economy as compared to base year models. For example if your purchase a plug-in hybrid electric car on or after January 1, 2009 you would qualify for a tax credit in the range of $2500 – $7500, based on the tax credit formula.

 

There is a 60,000 vehicle limit per manufacture on the previously mentioned vehicles before a phase out period begins. Both Toyota and Honda have already reached the phase out period, but the tax credit is still available for Nissan, GM and Ford vehicles. These credits are available for automobiles that have been placed in service starting January 1, 2006. The hybrid and diesel tax credit will be phased out over a 15 month period after the manufacture has sold 60,000 vehicles. The tax credit for the plug-in hybrid electric will be phased out when the manufacture has sold 250,000. The plug-in hybrid electric car tax credit is based on the capacity of the battery system. The tax credit is effective January 1, 2009.

 

There are many other home and office products that will save you money on your energy bill. Look for the ENERGYSTAR label on the product or packaging. Categories include appliances, home electronics, office equipment, lighting and commercial food service products. They may not qualify for a tax credit but at least you can reduce your monthly utility bill. For more detailed information please visit the www.energystar.gov website.