With the end of 2019 coming faster than many of us expected, now’s the time to start considering what your tax bill is going to look like for the year. Taxes are one of your largest expenses every year, so naturally any chance you get to save on these costs will only help you keep more of the money you’ve worked so hard to earn. However, taxes aren’t really negotiable, and you can’t just shop around for a better deal. However, you can take advantage of some great incentives out there which help reduce your tax burden, thus meaning getting a better refund or owing less in total.
These incentives can be found in a number of different places, but one that surprises many people is incentives available for purchasing energy efficient equipment and appliances for your home, including heating and cooling. For the average American, over half of the energy they consume every year is committed to heating and cooling, so naturally any improvements to your heating and cooling system will save you a bundle just in this monthly expense alone. However, there are several incentives out there which are designed to encourage homeowners to purchase more energy-efficient equipment, which is great news for those looking to save on their taxes.
The Nonbusiness Energy Property Tax Credit
Unfortunately, this largest federal incentive for energy-efficient heating and cooling equipment has now expired, and new systems installed this year don’t apply for it. However, if you installed one of these systems in a previous year and either haven’t claimed the credit or are submitting an amended return for 2018 or an earlier year, then you may be able to take advantage of this credit. As long as your equipment qualified for the credit when it was installed and it was installed in your primary residence (no vacation homes or investment properties), then you may be able to file for this credit in your return for 2018 or before.
Likewise, if you filed for the credit in a previous year but didn’t claim the credit in its entirety then, you can still claim the remainder of this credit on your 2019 taxes. We strongly recommend speaking with an accountant or tax professional to learn more about how exactly to go about claiming this credit for previous years in order to make sure it’s done right.
Virginia High Efficiency Tax Credits
Tax incentives do also vary on a state by state level, as some states will offer additional incentives for energy-efficient HVAC equipment. Virginia does offer one of these incentives, known as the Energy Efficient Buildings Tax Exemption. This is a pretty simple program: so long as you own an ENERGY STAR qualified, home or other building, you could become entirely or partially exempt from local property taxes.
In order to be eligible, your home or business’s building would need to meet the following criteria:
- Exceed the energy efficiency standards found in the Virginia Uniform Statewide Building Code by at least 30 percent
- Meet or exceed the performance standards set out by the Green Globes Green Building Rating System of the Green Building Initiative
- Meet or exceed performance standards from the Leadership in Energy and Environmental Design (LEED) Green Building Rating System
- Meet or exceed performance standards from the EarthCraft House Program
- Be an Energy Star Certified Building
The best part about this particular credit? It can apply to both your home and your business. If your business invests in energy efficient equipment, including heating and cooling, you could save a substantial amount of money on your property taxes, which could be a huge relief when the time comes to file your taxes.
Want to learn more about installing new heating and cooling equipment in your home or business? Talk about your options with the team at American Mechanical! Give us a call at (757) 347-8549 today.