Renewable remodeling: Homeowners who have installed renewable energy
heating and cooling systems, including geothermal heat pumps, small wind
turbines, and/or solar energy systems, can claim 30 percent of the cost of a new
renewable energy system, with no maximum limit. An added bonus: the Residential Energy Efficient Property Credit , which runs through 2016, applies to any home you own, not just your primary residence.
Other eco-friendly home improvements, including adding
insulation and installing energy-efficient exterior windows, could qualify for the
Residential Energy Property Credit , which also lasts until the end of 2016. Applying only to primary residences, the credit is worth 30 percent of the cost of all
eligible modifications. Taxpayers can
pocket a maximum tax credit of $1,500 for improvements placed in service in
2009 and 2010.
Meanwhile, the Plug-in Electric Vehicle Credit offers a
tax credit worth 10 percent of the cost of certain low-speed electric vehicles
and two- or three-wheeled vehicles purchased after February 17, 2009 and before
January 1, 2012. Taxpayers can claim up
Commuter tax benefits:
Of course, driving an electric vehicle isn’t the only way to travel green. The
fiscal cliff deal has raised the public transit commuter benefit
for eligible employees whose companies participate in a benefit program from $125 to $240 a month, the same amount as the monthly pre-tax
parking benefit. Two years ago, as part of the transit parity provision, employees
could reserve up to $230 a month pretax salary for both transit costs and
parking. But after the provision expired at the end of 2011, the parking limit
rose to $240 a month, while the transit limit fell to $125 a month.
Taxpayer savings resulting from
restoring the transit parity provision are significant. Imagine that you’re in the 40 percent
combined federal and state tax bracket. Setting aside $240 a month instead of
$125 a month in pre-tax transit benefits translates to $552 saved per
Most taxpayers already know that they can get a deduction from donating old
clothes and furniture to their local thrift shop . But did you know that some
e-waste recycling programs also count as tax-exempt organizations? Our
increasing reliance on laptops, cell phones, and other electronics has resulted in a major e-waste problem. According to the U.S. Environmental Protection Agency, the U.S. alone generated 2.37 million tons of e-waste in 2009, only about 25 percent of which was collected for recycling.
Search the IRS’s exempt organizations database to check whether your local e-waste recycling facility qualifies as a 501(c)(3) organization, which would make your e-waste donations to them tax-deductible. Do your
research to make sure that your old electronics go to an organization that will
recycle them responsibly. Better yet,
donate your items to an organization that will put them into reuse.
When making any donation, remember to save your receipts so
that you claim the correct amount on the Schedule A (Form 1040) for itemized deductions. Taxpayers
whose total charitable deductions fall below $500 don’t need to submit an
additional form. Those whose deductions
exceed this amount must complete Form 8283 with their return. To learn more,
read the IRS’ Guide to Charitable Contributions .
Melissa Pandika is an editorial intern at Sierra and a graduate journalism student at Stanford University. Her interests include environmental health
and justice, urban environmental issues, and conservation
biology. She has a soft spot for cetaceans.