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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