Looking for those green breaks at Tax Time?

1040 Individual Tax Return - green tax write-offs
Photo: Earth911.com/Flickr/401K

Maybe you’re working on getting your tax data together for filing next month or perhaps an extension is in order for you this year.  Either way when getting your receipts together it can be easy to forget about some of the newer tax advantages, especially the newer green tax write-offs.  I ran across this article on Earth911.com written by Alexis Petru which sums up the write-offs very well.

1. At home: energy efficiency upgrades

Making home energy efficiency improvements is always a good financial investment, but it was particularly smart to complete your retrofits last year. Up to $500 worth of federal tax credits for energy efficiency projects expired on Dec. 31, 2011, and it is not clear if Congress will reinstate them for this year, according to the Alliance to Save Energy.

Eligible home sealing retrofits: roofs, insulation, weather stripping, caulking, windows, doors and skylights

You can receive a tax credit for 10 percent of the cost of the equipment, up to $500, for new metal or asphalt roofs, retrofits that seal home air leaks and energy-efficient doors and skylights. New windows are also eligible for a 10 percent tax credit, but this incentive is capped at $200. These incentives for home sealing retrofits do not apply to installation fees – only the cost of the equipment.

A tax credit is generally more lucrative than a tax deduction: A deduction removes a percentage of the taxes owed, while a credit reduces your taxes dollar-for-dollar.

Eligible home heating and cooling equipment: high-efficiency furnaces, boilers, air conditioners and water heaters, as well as air circulating fans, biomass stoves and geothermal heat pumps

Incentives vary for equipment that heats and cools your home or warms up your water: $50 for an air circulating fan, $150 for furnaces and hot water boilers, and $300 for biomass stoves, central air conditioning units and water heaters.

Eligibility requirements: Visit Energy Star’s website to identify the home sealing products and heating and cooling equipment that qualify for these tax credits and for tax filing instructions. The new equipment must have been installed by Dec. 31, 2011, in your primary residence that you own – not a new home or rental (new homes are eligible for separate energy-efficiency tax credits).

Note that there is a $500 lifetime limit for energy efficiency tax credits, so if you received over $500 in these tax credits from 2006-2010, you are not eligible for any more credits on your next tax return.

Finally, make sure to hold on to your receipts: You won’t need to submit them with your taxes, but keep them in your records in case of an audit.

Other rebates and incentives: Even if you didn’t purchase a product that qualifies for a federal tax credit, you may still be able to receive rebates and other incentives from your city, state or local utility. Call your local agencies for more information, and visit the Database of State Incentives for Renewables and Efficiency.

2. At home: installing renewables

Unlike the tax credits for energy efficiency improvements, incentives for renewable energy systems are funded through Dec. 31, 2016. So whether you installed a solar hot water heater last year or splurged on a solar photovoltaic array or small wind energy system, you may receive a tax credit of 30 percent of the cost of the system, with no project cap.

This incentive applies to existing and new homes, as well as principal residences and second homes – but does not cover rental properties. Visit the Energy Star website to learn about system requirements and tax filing instructions.

3. In the driver’s seat: green vehicles

While incentives for hybrid cars expired in 2010, you can still get a tax break if you purchased an electric vehicle (EV) or plug-in hybrid last year.

Both EVs and plug-ins qualify for a tax credit of up to $7,500, depending on the vehicle’s battery capacity. The incentive will be phased out once an automaker sells 200,000 of the vehicle model.

If you purchased a Nissan LEAF or Chevy Volt last year, you’re in luck: You can cash in for the full $7,500 tax credit for either vehicle.

Visit the DOE’s Fuel Economy website to see if your plug-in or all-electric vehicle was eligible for a federal tax credit last year and for tax filing instructions. To learn about local and state incentives for alternative-fuel cars, check out the DOE’s Alternatives Fuels Data Center.

4. In your community

Even if you didn’t make any major eco-friendly purchases last year, you can still receive tax deductions for donations you made – giving used items in good condition to charitable organizations like Goodwill or making a contribution to your favorite environmental nonprofit such as The Nature Conservancy.

Just don’t forget to request a donation receipt to keep in your files – even for donated goods.

For requirements and tax filing instructions, browse the Internal Revenue Service’s (IRS) guide to charitable contributions. If you donated goods to an organization that lets you calculate the cost of your contribution, check out the IRS’ guidelines on determining the value of your donated property.