Summer on the East Coast has arrived with a vengeance. Temperatures already are near or exceeding 100 degrees. And it won't be long before the rest of the country is sweltering for the next three months.
The tax code, however, can help with your cooling needs.
The 2009 stimulus bill created a tax credit (remember, these are better than deductions since they reduce your tax bill dollar-for-dollar) worth up to $1,500 for homeowners who make certain energy-efficient improvements to their residences. A new air conditioning unit could qualify for this tax break as long as you get the qualifying equipment installed by Dec. 31.
The reason for the deadline? Like so many other tax breaks, this one expires because, say lawmakers, of budget concerns. I suspect, however, that it's because it gives them the option to keep giving the same tax breaks to taxpayers (aka voters) over and over, but that's for another blog post.
Another important note: This tax credit applies to energy-efficient home improvements made in 2009 and 2010. So if you used it up last year then you can't claim it on your 2010 tax rerun.
If, however, you didn't claim the full credit on your 2009 taxes, or you claimed less than $1,500 in eligible home energy upgrades, you can claim the remainder on your 2010 Form 1040 (actually on Form 5965 that you file with your return next year).
But, as I noted, a new AC or other improvements, such as added insulation or new storm doors or windows, must be made by the end of the year.
There is some talk of extending this tax break as part of a larger energy bill. The prospects of comprehensive energy legislation, however, seem to be fading.
Even more to the point, things have gotten wackier of late on Capitol Hill when it comes to taxes.
Political and deficit concerns -- some might say obstructionism on the part of Republicans looking to regain Congressional control -- are causing some pundits to predict that all meaningful tax legislation might be postponed until after the November midterm elections. Gee, I wish I could simply quit doing my job for nine months, don't you?
And if that happens, who knows what a lame-duck Congress might do. My bet: Lots of nothing!
So if your AC is on its last legs, check out the energy-efficient home improvement tax credit. It could be exactly what you need to keep your cool this summer.
Has this tax break or previous ones prompted you to make home improvements? Would you make a major home energy upgrade just to get a $1,500 tax credit?