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Tax Tidbit 11/06: Did You Know That Conserving Energy Can Reduce Your Taxes in 2006 & 2007?

For 2006 and 2007, you may be eligible for up to a $500 tax credit on your Form 1040 for investing in qualified energy savings expenditures on your house.  Types of expenditures that may qualify include:

• Insulation systems
• Air circulating fans                 
• Hot water heaters
• Exterior windows & doors
• Metal roofs 

In addition, you may be eligible for up to a $2,000 tax credit on your Form 1040 for investing in solar water heaters or solar electricity equipment. 

Tax credits are more valuable than tax deductions because they reduce your tax liability dollar-for-dollar, rather than merely reduce your taxable income.  If you have any questions regarding whether your energy saving purchases qualifies you for a tax credit, please contact Andrew D. Ross, CPA of Bedard, Kurowicki & Co., CPA's, PC at (908) 782-7900 ext. 113.