Earth Day: Go Green and Save Green with These Tax Tips

Going green is not only environmentally friendly, but it also can be friendly to your wallet. The recently passed American Economic Recovery and Reinvestment Act offers many eco-friendly tax breaks for 2009 as part of the stimulus package, according to the Illinois CPA Society.

The Illinois CPA Society offers the following tips so you can act now and save later:

  1. Catch some rays. The State of Illinois and the Renewable Energy Resources Program (RERP) are offering up to 30 percent rebates up to $10,000 on solar energy systems installed after Jan. 1, 2008.
  2. Ditch the gas. Buy a hybrid and get a net tax break between $250 and $3,400 based on the weight of the vehicle and the amount of gas saved. Mass transit users can also use pre-tax dollars in an amount up to $230, increased from $120, to purchase tickets and passes.
  3. Be energy efficient. Install energy-efficient windows, insulation, roofs, doors, air conditioners and central heating units and you may be eligible for a tax credit up to $1,500. Larger purchases, such as solar heaters and geothermal pumps, qualify for a credit of 30 percent.
  4. Buy green. First-time homebuyers qualify for a credit of $8,000, as well as any tax breaks on green materials that they add to the home.

Be sure to document all purchases of green materials with receipts and maintenance records in order to get the full credit amounts, the society said. Many of these credits are only on the books for 2009 and 2010, but look for them to be renewed in the future. Speak with a CPA to verify the credit amounts for this coming tax season and clarify any of the purchase requirements.

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