Lower Your Taxes by Thinking Green
Outfitting your home with new storm doors and windows or buying a gas-efficient hybrid car can help you score tax credits.

Record-high gasoline prices earlier this year and concerns about heating fuel costs this winter may have you thinking about outfitting your home with new storm doors and windows or buying a gas-efficient hybrid car. If you install qualified home improvements by December 31, you can claim an energy tax credit for 2006 worth 10% of the cost up to $5,000, resulting in a maximum tax credit of $500.
Among the improvements covered are 10% of the cost of installing insulation, energy-efficient windows, doors, skylights and metal roofs coated with heat-reducing pigment. But only $200 of your $500 lifetime maximum credit can be allocated to replacement windows.
The energy credits are more valuable than a deduction because they reduce your tax bill (or boosts your refund) dollar-for-dollar, rather than merely reducing the amount of income that is taxable. And you can claim the credit regardless of your income level.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Also, if you bought a hybrid car or truck this year, you qualify for a tax credit ranging from $250 to $2,600, depending on the make and model. However, the tax credit for some of the most popular fuel-efficient vehicles -- the Toyota Prius, Toyota Highlander Hybrid and the Lexus RX 400h -- has already been cut in half now that the manufacturers have sold their initial 60,000 vehicle allotment. Credits for qualifying Toyota and Lexus hybrids now range from $1,100 to $1,575.
The energy tax credits for cars and home improvements are also available in 2007. Check www.energytaxincentives.org for details.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

-
New $6,000 'Senior Bonus' Deduction: What It Means for Taxpayers Over Age 65
Tax Changes If you’re an older adult, a new bonus tax deduction could provide a valuable tax benefit. Here's how it works.
-
Claiming the Standard Deduction? Here Are Ten Tax Breaks For Middle-Class Families in 2025
Tax Breaks Working middle-income Americans won’t need to itemize to claim these tax deductions and credits — if you qualify.
-
Over Age 65? New $6,000 'Senior Bonus' Deduction Is Available Even If You Itemize
Tax Changes If you’re an older adult, a new bonus tax deduction could provide a valuable tax benefit. Here's how it works.
-
New Trump Tax Bill: Five Changes Homeowners Need to Know Now
Tax Changes Trump’s new tax legislation is reshaping how tax breaks for homeowners work.
-
Stay NJ Could Give You $6,500: The Deadline You Can't Miss
Property Taxes New Jersey has a new property tax relief program for 2025. The application deadline is approaching fast.
-
How the 2025 Child Tax Credit Rules Impact Single Parents
Tax Credits New changes to family tax credits, like the Child Tax Credit, will impact the eligibility of some households.
-
The Fall Garden Tax? What to Plant and How to Prepare
Tax Tips Fall gardening could increase your taxes this season. Here’s what to know while planting in 2025.
-
How Your 2025 Wedding Could Save You Money on Taxes
Tax Breaks There are some wedding expenses that are tax-deductible, and you don’t want to miss out on savings.