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.
Sign up for Kiplinger’s Free E-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.
-
Stock Market Today: Have We Seen the Bottom for Stocks?Solid first-quarter earnings suggest fundamentals remain solid, and recent price action is encouraging too.
-
Is the GOP Secretly Planning to Raise Taxes on the Rich?Tax Reform As high-stakes tax reform talks resume on Capitol Hill, questions are swirling about what Republicans and President Trump will do.
-
Ten Cheapest Places To Live in FloridaProperty Tax Make your Florida vacation spot daily living — these counties have the lowest property tax bills in the state.
-
Trump’s Tax Cut Risks Your SNAP, Medicaid BenefitsTax Cuts The GOP budget blueprint could slash lifesaving programs for millions of U.S. households.
-
Missed Tax Day? Nearly One Million Taxpayers Still Can File and Claim Valuable Tax RefundsTax Refunds As many as one million taxpayers could be missing out on a significant tax refund.
-
Which Generation Pays the Most Tax in the US?Tax Burden Polls show that most people feel like taxes are unfair. But which age group bears the brunt of the tax burden in the United States?
-
How the Trump Harvard IRS Tax Threat Could Impact YouTax Law Trump's latest higher education showdown raises fundamental questions that could reach beyond Harvard's nonprofit tax status.
-
Tax Day 2025: Don’t Miss These Freebies, Food Deals and DiscountsTax Day You can score some sweet deals on April 15 in some select restaurants like Burger King, Shake Shack, and more.
-
Tax Time: Does Your Kid Influencer Owe Taxes?State Tax Some minors are making big money on social media. Here’s how to know if they need to file taxes.
-
Trump Plans to Terminate IRS Direct File programTax Filing The IRS Direct File program was piloted last year in 12 states and has since expanded to 25. But will it last under the Trump administration?
