Saving money and energy still go hand in hand, thanks to the American Taxpayer Relief Act of 2012, which extends federal income tax credits for energy efficient improvements to your existing residence through December 2013.
What’s covered? Certain heating, ventilating, and air conditioning units, gas, propane, or oil water heaters, insulation, specified doors and windows, metal and asphalt roofing, and biomass stoves. If you invest in any of these, be sure to check whether the credit applies to installation costs as well as the purchase price. In general, you can claim a credit of 10% of the cost (up to a maximum lifetime limit of $500) on your federal income tax return for 2012 or 2013. The credit will increase your refund or reduce the amount you owe.
Want to save more? Your utility company might offer rebates or tax incentives on energy saving windows, siding, insulation, and programmable thermostats. Some Energy Star appliances, such as dishwashers, washing machines, and refrigerators, carry rebates, too.
For additional savings, ask your electric company about a home energy check. The evaluation—which is usually free—can show you what types of energy-efficient improvements can reduce your bill. Examples include repairing ductwork, upgrading insulation, replacing windows, and re-roofing with reflective materials.