Energy policy act of 2005

[azanon]

I briefly touched on this in the water heater thread, but i wanted to make sure my frugal friends here are aware of these tax breaks that are good through the end of 2007. Link at http://www.energy.gov/taxbreaks.htm

The best one looks like the water heater one, because its a $300 credit on an item that i'm told doesnt cost much more (if not at all) than $300 dollars anyway (for a typical 40/50 gallon water heater). So, if you install it yourself, its basically free. The other credits might be useful too. Refer to that link above to make sure whatever you get meets the minimum specifications required to be eligible for the credit.

Remember, credits subtract directly off of what you owe on your taxes, as opposed to deductions, which you have to itemizie and dont even help unless you exceed the standard deduction.

Azanon

[Danny]

Thanks azanon -
couple of those are possibilities this year.

[Caroline]

My rental property clearly does not qualify for the residence credits -- but would it qualify as a business under this program?

For instance, if i switch out the 40-year-old furnace with a qualified replacement, can I get the credit?

Caroline

[cute fuzzy bunny]

I believe the only water heaters that qualify for that tax credit are geothermal and ones that beat a specific energy efficiency rating, of which currently only some tankless units successfully do. The cheapest tankless heaters are a good bit more than $300 to buy, and can be pretty expensive to install depending on the location and setup. A tankless heater to service the average 3-4 bedroom, 2-3 bathroom house is going to run close to a grand plus installation.

Sure puts a dent in the cost of it, if you're going to do it anyway though...

"A tax credit of up to $300 for geothermal heat pump water heaters with an evergy factor of at least 2.0 and for natural gas, propane, or oil water heaters with an energy factor of at least 0.8. The only models that meet this standard currently are tankless water heaters and some systems that combine both space and water heating."