Taxing Times For Energy Savings

If you were thinking about making home improvements with an eye to improving energy efficiency, you're better off waiting until 2009.

If you are thinking of making energy saving improvements to your home like extra insulation or energy saving windows, consider postponing installation until 2009. A credit of up to $500 may be available for these improvements if made next year (but not this year).

-- Substantial tax credits are available for installing energy generating equipment (such as solar electric panels or solar hot water heaters) to your home.

Congress allowed a tax credit for home efficiency to expire after 2007, and didn't reinstate it until 2009.

This once again points out the arbitrary nature of the tax code and how those who write the Code have no idea what they're doing most of the time. At a time when people should be encouraged to increase home efficiency through upgrading heating and cooling systems, insulation, and windows so that less energy is wasted, the government let the credit expire. Further, the failure to have a credit for 2008 means that those who might consider taking advantage of the credit will wait until 2009, meaning that spending on those areas will take a further hit through the end of the year.

So, if you are thinking of a home improvement that could take advantage of credit, wait.