Why You Should Claim Clean Energy Credits
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If you are looking for a tax credit that will not only benefit you on your tax return, but will also save you thousands of dollars in the long run, then you should highly consider clean energy tax credits. In addition to potentially thousands of dollars in tax credits, making clean energy improvements to your home can significantly reduce your energy bills for years to come.
Since the Inflation Reduction Act was passed in 2022, clean energy tax credits have expanded, allowing more Americans to benefit from clean energy products and improvements to their homes. According to data from the U.S. Department of the Treasury, last year, 2.34 million households averaged $882 in credits for clean products like heat pumps and insulation, while another 1.25 million households received around $5,084 each for projects like installing solar panels.
These credits can significantly offset any expenses incurred in making these improvements to your home, and even better than a one-time tax credit, clean energy projects will bring long-term savings on your energy bills. Improving your house’s energy efficiency can save you between $600 and $3,100 per year. In the long-run, that’s tens of thousands of dollars you can save by upgrading now.
But as great as the credit and savings sound, you shouldn’t impulsively buy any clean energy products/services and ex[ect to qualify for tax credits. The IRS has strict guidelines on what qualifies for clean energy credits. To ensure you are executing this tax strategy correctly to optimize your tax position, it’s important to consult with a tax professional who can guide you. Reach out to the experts at XQ CPA for personalized advice on how you can maximize your clean energy credits. We’re just a call or click away.
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Want to pay less taxes? Read XQ CPA's official tax planning guidebook! How to Grow Your Wealth Through Tax Planning.
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