The Inflation Reduction Act, signed into law back in August of 2022, has several new credits totaling up to $3,200 for your personal income tax return. The old credit only totaled $500 over your lifetime.
Beginning in 2023, there’s a $1,200 maximum aggregate annual tax credit for building envelope components, home energy audits, and energy property. Electric or natural gas water heaters and heat pumps, as well as biomass stoves and boilers have an additional annual $2,000 credit.
In order for the improvements to be eligible for the $1,200 credit, they must include one of the following.
1 – Exterior Doors – 30% of costs up to $250 per door with a $500 aggregate
2 – Exterior windows and skylights – 30% of costs up to $500
3 – Insulation materials – 30% of costs
4 – Home energy audits – 30% of costs up to $150
Further requirements say that it must be installed inside the US, that the taxpayer must be the original user of the improvement, and that the taxpayer must reasonably expect to use the improvement for the following 5 years.
In order for new improvements to be eligible for the $2,000 credit, they must be…
1 – Natural gas, propane, or oil water heaters
2 – Central Air Conditioners
3 – Natural gas, propane, or oil furnaces and hot water boilers
4 – Heat pumps, biomass stoves, and biomass boilers
All of these improvements will provide a credit of 30% of costs up to $600 per item. In addition, they must be installed inside the US and the taxpayer must be the original user. This credit can be obtained if the improvements are on either your personal home or a vacation property.
Let me leave you with this.
We have a long weekend coming up. As we celebrate the Thanksgiving Holiday, take a moment to appreciate the loved ones gathered around your table.
Because they’re what this thing is all about.
Put all of the differences you have with your family members on the side for now. The Thanksgiving Table is no place for any of that.
Let your family know how much they’re loved. Spend time with them, letting them know that they’re appreciated, adored, and cherished.
And take some time for yourself. Read a book, go for a walk, and do whatever it takes to recenter your soul. Something tells me that next year might not be an easy one.
A Blessed and Happy Thanksgiving to you and yours.
We’re all going to get through this. Let’s get through it together.
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