Whether you’re walking down the street or watching a presidential debate, the health of the environment is a topic you really can’t miss.
Calls to go green are heard far and wide, and regardless of what methods you personally take to keep the world around you clean and healthy, you have to admit that being a good steward of Mother Nature just feels good.
But “going green” doesn’t just have to refer to Mother Nature. In fact, when you make smart choices about eco-friendly changes, you can put a lot more green in your pocket come tax time. And trust us. That feels good, too.
When you go green, you can save big. Whether we’re talking about massive changes or small ones, there are plenty of eco-friendly changes you can make to save on your taxes.
Although there are plenty of ways to help the environment and lower your tax bill, we’ve outlined three of the biggest and most popular. To get you started with your green tax savings, we recommend recycling your electronics, buying an electric car, or renovating your home.
Old electronics are among the worst household items to throw out, but it’s a reality that they often carry a certain shelf life within your home. New TVs, computers, printers, and all sorts of electronics come out regularly and can threaten to make your current model obsolete.
If you’re planning to upgrade to something new, try to avoid the sometimes tempting instinct to ditch them on the curb or toss them in the nearest dumpster. If you really want to make an impact on your taxes, also avoid selling them on Craigslist. Instead, turn that extra $75 into potentially more in tax savings by donating it to a charity or a recycling company.
You can deduct the value of most household items, including TVs and other electronics, when you donate them to a nonprofit charity or 501(c)(3) groups. This includes organizations like Goodwill, as well as many nonprofit recycling companies. Just check before you donate to ensure it’s a nonprofit organization before donating, itemize your deductions, and you can deduct the estimated value of the item!
Gas prices are always on the mind, so it’s no surprise that new car buyers are increasingly moving toward electric cars. To promote cleaner driving, the federal government and numerous states offer tax credits and other financial incentives for electric cars.
The IRS offers a tax credit ranging from $2,500 to $7,500 for each EV purchased, and varies based on battery capacity and vehicle size. This tax credit is limited, and begins phasing out for each manufacturer once 200,000 qualified electric cars from that manufacturer have been sold. Fortunately, that limit has not been reached as of yet.
Also look to your state and local municipality to see if you can receive other incentives for driving electric. Tax credits, vehicle rebates, registration fee reductions, and other exemptions may be available. You can learn more about the U.S. Department of Energy’s additional rules, laws, and incentives regarding EVs on their website.
Whether you’re renovating your home to sell or looking to stay put for years to come, there are many reasons why you might benefit from implementing energy-efficient measures into your home. They can substantially lower your own bills over time, and should you choose to sell, also improve the value of your home as energy costs continue to rise.
To encourage these changes, the IRS offers a number of tax credits and tax breaks for those looking to make some green changes to their home. The most well-known and popular program is the EPA’s Energy Star program. Although some tax breaks for energy efficiency expired in 2011, other credits will still be accessible through 2021 for others. Regardless, you’ll feel the financial benefit right away when you get your first lowered water and power bill.
Also look for the Residential Renewable Energy Tax Credit, which can benefit you when you install solar, geothermal, wind, and fuel-cell technology. So, if you’re installing solar panels or solar-powered water heaters, wind turbines, fuel cells that rely on renewable resources, and other related products, you can benefit from a credit of up to 30% of the cost, including installation.
Combining your interest in the environment with your interest in lowering your taxes just makes sense. Why not lower your tax bill while lowering your carbon footprint? These changes may not be as tangible as picking up litter or choosing recycling over trash, but they can help you save in the short term and help Mother Nature thrive in the long term. That way, everybody’s happy!
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