You have to love the simplicity and straightforwardness of this new 2009–2010 homeowner’s energy property tax credit. Here’s the new deal: During 2009 and 2010, buy property that qualifies for the 30 percent tax credit and install it in your existing principal residence, and you qualify for a tax credit of up to $1,500.
Tax credits are best. They reduce your taxes dollar for dollar. This credit is called a “nonrefundable credit,” which means that you need to have taxes due for the credit to pay off for you.
Example. Your taxes due before this credit are $1,000. You qualify for a credit of $1,500. You may offset the $1,000 of taxes due, but the government is not going to give you more than that. Thus you benefit by $1,000.
For purposes of this credit, consider making $5,000 in improvements to your main home because that yields a tax credit of $1,500. The new credit is expansive and can apply to qualifying
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