“Going green” is more than a passing trend – it shows that you and your business care about the environment, something that many Coloradans value. Taking steps to be environmentally conscious not only benefits the world, but it also makes you eligible for some excellent tax exemptions. Here are just a few things you should know about green tax breaks:
Solar Energy Home Improvements
With 300+ days of sunshine, Colorado is an optimal location for utilizing solar electricity and water heating. If you install solar panels in a resident that you own (rentals don’t qualify), you may claim a tax credit equal to 30 percent of equipment expenses.
To qualify for the water heating portion of this credit, the majority (more than half) of the energy that is used to heat your home’s water must be fueled by a solar water heater. Furthermore, the water cannot just be used in a swimming pool or hot tub; it must be used inside your home. Check out the Solar Rating & Certification Corporation to see if your home qualifies.
Who knew that 60 miles to the gallon can also translate into a tax credit worth up to $7,500? Owners of electric vehicles or electric vehicle hybrids are eligible for this federal income tax credit, with a few restrictions applied of course.
Among some of the more obvious requirements, such as having four wheels, electric vehicles must be new rather than refurbished, use a battery that provides four kilowatts of power, plug into an external source to recharge, and meet the federal clean air standards.
Environmentally Responsible Donations
Cash donations are always admirable, but the type of donation we’re zeroing in on today is electronic item donations. Computers, laptops or accompanying parts are terrible for landfills, which is why donating such items is tax deductible.
If donated electronics have an estimated fair market value of up to $500, keep a written record of the items, including its condition and the price you would give them. Usually if the value is more than $500 – and especially if it’s more than $5,000 – you will have to get it appraised or fill out a tax form to make sure the item qualifies.
Commuting Using Public Transportation
Contributing to pollution is bad for the air…and your pocketbook. If you are in a position to utilize public transportation rather than a personal vehicle, you might qualify for a pre-tax saving tax break.
Furthermore, biking to work could be considered a tax-free benefit if your employer offers a reimbursement program for bicyclists. Talk to your employer and Yeater & Associates to see if your bike commuting translates to a tax break.
Energy-Efficient Home Exteriors
Saving energy can be as simple as updating your home’s exteriors. If your primary home’s insulation, roofing, windows, skylights and doors are up to energy efficient standards, you may be eligible for significant federal tax credits.
In order to qualify, many of these elements must meet ENERGY STAR standards to prove their effectiveness.
Have questions about green tax breaks and whether or not you qualify? Our team at Yeater & Associates, CPAs is here to help. Call us at 970-378-4830 to set up a meeting today.