Now that we’ve improved the energy efficiency of our cars through Cash for Clunkers, President Obama has proposed helping us improve our homes through Cash for Caulkers.  The proposal would provide a tax credit of up to $12k per home for 50% of the cost of projects that improve the energy efficiency of existing homes.   Unfortunately, Congressional funding to enact this legislation seems to have stalled.

Improving the energy efficiency of a home is more complicated than buying a vehicle. Each home is different and requires a thorough energy audit to identify and prioritize problems to deliver the best bang for the buck. The first challenge, of course, is to find a reputable and unbiased company to help you. Ask a guy who specializes in window replacement and just guess what he’s going to recommend.

Speaking of windows, it turns out that it may not pay to replace old single-panes with new double panes. In many cases, heat is lost primarily through lack of insulation around the frame and poor weatherstripping. It may be more cost effective to do a window tune-up rather than a replacement.  Read the rest of this entry »

Tags: Cash for Caulkers, energy, energy audit, Massachusetts, tax credits for energy efficiency

Today the Senate approved a tax credit of 10 %, up to $15,000, towards the purchase of a home.  This is an increase over current law which was written up in a previous post on first-time homebuyers credit, which covers up to $7,500.  The new credit would be available to all home-buyers (not just first-time buyers).  It’s an amendment to the overall stimulus package.  We’ll see if it makes it on through the House.

Tags: credits, economic stimulus, real estate

If you’re thinking of buying your first house, this new credit might help.  It’s a credit of up to $7,500 that is repaid (interest-free) over 15 years.  After you receive the credit, you pay 1/15th of it back each year when you file your taxes (e.g. $500/year).

The fine print:  To be eligible, you must buy the house between 8 April 2008 and 1 July 2009.   Individuals filing single and married couples filing jointly are eligible for $7,500; married persons filing separately are eligible for $3,750.  The house must be in the US.  The house must be your primary residence, not a vacation or rental home.   The credit phases out for incomes of $75,000 – 95,000 for individuals filing singly and $150,000 – 170,000 for married couples filing jointly.

IRS Form 5405 and news item of 23 December 2008.

Tags: credits, real estate

If you received the Economic Stimulus Payment last year, you will likely not be eligible for the “Recovery Rebate Credit” for 2008.  However, you can take comfort knowing that the Economic Stimulus Payment is at least not taxable.  The Recovery Rebate is based on tax year 2008 (instead of 2007) and is a credit of up to $600 ($1,200 if married filing jointly) with an additional $300 for each eligible dependent child.  But stay-tuned – I wouldn’t be surprised if the new administration initiates a new stimulus program.

IRS Pub 1040 Instructions, p. 6 and 61.

Tags: credits, rebates