Remodeling, upgrading or otherwise improving your home does a lot more than make it look nicer. There are many home improvements which make you eligible for tax breaks and benefits. Read on for an overview of some of the most popular types of tax break improvements, as well as important points to keep in mind before you begin a project.

Residential Energy Efficiency Property Credit

A long list of home improvements can qualify you for a tax credit. However, figuring out all the different types of credits, breaks and rebates can be confusing. One credit is called the Residential Energy Efficiency Property Credit. Items covered under this credit include solar panel to heat your home or a solar-powered water heater, a wind turbine for energy, a geothermal heat pump and renewable-source fuel cells (usually powered by hydrogen).

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Nonbusiness Energy Property Tax Credit

This is another very popular type of tax break for energy efficiency. The Nonbusiness Energy Property Tax Credit includes two main types of tax breaks – qualified energy efficiency improvements and residential energy property costs. The first category covers certain types of energy-saving roofing materials, exterior windows (including skylights), exterior doors and certain types of insulation.

The next category covers boilers, furnaces and water heaters which use natural gas, propane or oil, advanced circulating fans for these types of heaters and stoves which utilize biomass fuel. It also covers central air conditioning systems, electric heat pumps and water heaters which use electric heat pumps.

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Do Your Research

It’s important to remember that each improvement must meet rather strict regulations in order to qualify for a tax break. You can look these restrictions up online, or ask a qualified tax professional if you have your taxes professionally prepared.

It’s also important to realize that while the list of federal energy tax breaks is long, there are also state-specific tax breaks. Check with your local government websites or a tax pro to see if any of these breaks also apply to the improvements you’ve installed. Tax pros are the best qualified people out there to help you navigate these tricky waters and ensure that you’re getting the biggest bang for your buck. Sometimes these tax breaks overlap, and it can be confusing as to which is your best bet. A tax pro who is familiar with these regulations can quickly clear up any confusion and help you receive the biggest rebate possible.

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Research Before Installation

It’s always a good idea to read up on specific regulation qualifications – or ask tax expert – before you begin a potentially deductible or rebate-worthy home improvement project. Some types of improvements, for example, may only qualify for a rebate if they are performed by specially trained professionals. Energy efficient HVAC systems are a good example of this, since they should always be installed by a professional. Trying to DIY an entire HVAC system is not only dangerous, but it could void your warranty and leave you out in the cold regarding a rebate.