Looking for a tax Break?
Your home may be holding some new tax breaks. Environmentalists
say the energy bill signed into law by President George W. Bush
recently does little to reduce the nation's dependence on
foreign oil.
But the measure has been hailed by big business, the trucking
industry and farmers that qualify for tax breaks. The appliance
industry also sees a benefit in tax breaks for manufacturing
highly efficient products.
That's only the tip of the iceberg of small breaks included for
homeowners who make improvements after Jan. 1.
Maytag lost no time in announcing that it could earn tens of
millions of dollars in federal tax credits, and the bill would
help expand U.S. sales of highly efficient clothes washers,
refrigerators and dishwashers.
Maytag Chief Executive Officer Ralph Hake said the
manufacturing tax credit is expected to have a positive impact
on the company's bottom line and will support future product
innovation.
And tax breaks for manufacturers could lead to lower prices for
consumers. The credit, which applies only to U.S. production,
provides manufacturers with a credit of $50 to $175 for
appliances produced in excess of a benchmark.
Other provisions of the bill could expand state incentive
programs, including up to $250 million over five years for
rebates to consumers purchasing energy-efficient appliances.
Other provisions of the bill are aimed at home improvements,
and many of them can be made by do-it-yourselfers with supplies
or materials bought at stores like Home Depot. Consumers can
receive tax credits up to $500 on the amount they spend to
upgrade thermostats and caulk leaks. There's also a $200 maximum
credit for installation of new exterior windows.
Another provision offers a 10 percent tax credit for
improvements to the building envelope, which is everything that
separates the interior of a building from the outdoor
environment, including the windows, walls, foundation, basement
slab, ceiling, roof and insulation. Then there are larger-ticket
items. Consumers can receive a credit of up to $300 for
purchases of a highly efficient central air conditioner, heat
pump or water heater, and up to $150 for installation of a
highly efficient furnace or boiler.
MORE CREDITS
There also are credits for purchases of advanced main air
circulating fans, natural gas, propane, or oil furnaces or hot
water boilers, and other qualified energy efficient property.
For those who want to harness nature's energy on their own,
there is a credit of up to 30 percent of the cost, or up to
$2,000, for installing solar-powered hot-water systems used for
something other than heating swimming pools and hot tubs.
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