From solar panels to electric cars people everywhere are starting to think green. It’s more than just about saving the planet (though that’s reason enough) it’s also a great way to save money! Experts estimate that we could save around $26 trillion by the year 2030 if we engage in more sustainable living practices. Just how can being more environmentally friendly save you money? Below are four tax breaks you your clients get when they go green.
Nonbusiness Energy Property Credit
This tax credit actually expired at the end of 2021, however the Inflation Reduction Act revitalizes it and many other green tax breaks. Starting in 2023, the Energy Property Credit will cover 30% of the cost of any eligible home improvements such as energy-efficient; windows and doors, water heaters, air conditioning, furnace, and more. However there is a $1,200 annual credit limit which is further broken down into categories depending on the type of improvements made.
Residential Clean Energy Credit
This credit, previously known as the Residential Energy Efficient Property Credit, was previously set to expire in 2024 has since been extended to 2034. This tax break is good for 30% of the cost of qualified systems such as wind, solar, geothermal, and battery storage.
Alternative Fuel Refueling Property Credit
This tax break is worth 30% of the cost of an alternative fueling system on your property. In simple terms, if you have an electric vehicle then this tax credit will cover 30% of the cost of the equipment you would purchase to recharge it, up to $1,000.
Donations
As a tax pro you already know about charitable contributions and the tax breaks they can provide. However most people don’t think about donating their old electronics and the tax breaks they can contribute to your clients. An older but still working phone, gaming systems, or tablets are all examples of electronics which can be donated and the market value can be deducted from your client’s taxes.
Unfortunately climate change is a topic that is no longer debatable. We all have to do our part to make this world cleaner and greener. That doesn’t mean you and your clients can’t save a little money as well. Thanks to the Inflation Reduction Act, green tax breaks are extended and strengthened for the American people, allowing you and your tax payers to save some green while you go green.
