Lower Energy Bills Might Mean Lower Taxes

Tax season 2012 is upon us, and for those homeowners looking to maximize the tax credits on their returns, take a look at the Federal residential energy tax credit that you can claim using IRS form 5695. Upgrades made during 2011 to water heaters, furnaces, boilers, heat pumps, central air conditioners, building insulation, windows, doors, roofs, or circulating fans used in a qualifying furnace might be eligible for a tax credit up to $500.

For repairs made in 2012, unfortunately this tax credit cannot be applied in  your next filing. The credit expired on December 31, 2011. However, for investments made in alternative energy solutions, such as geothermal heat, wind, and/or solar energy power, homeowners can receive tax credits – through 2016.

For more information on the residential energy tax credit expiring at the end of 2011, view the form and instructions on the IRS website.