By this point, you probably know that going green helps protect and preserve the environment. While the infrastructure to support going green is still somewhat lacking, it’s not a thing that’s entirely without benefit to you. There are tax benefits available for certain green behaviors. So what can you do to take advantage of them?
Buy an Electric Vehicle
There’s been a pretty strong push by companies like Tesla to increase the infrastructure supporting electric vehicles. Thanks to ongoing efforts and their environmental friendliness, electric vehicles are becoming more popular. Buying one may also qualify you for a tax credit. You have the potential to qualify for a nonrefundable tax credit up to $7,500. How much you qualify for will depend on things like your tax liability, the vehicle’s battery size, and the vehicle itself. The credit does phase out, and any manufacturer who’s sold over 200,000 electric vehicles doesn’t qualify for the credit. There are still plenty of electric cars that do qualify though, so you still have a chance to take advantage of the credit.
Install Solar
Using renewable sources of energy in your home can be a great way to go green and give your wallet a helping hand. There are specific tax benefits available to those who install a solar panel system for their home. The federal government is currently offering a tax credit of up to 26% of the cost of the system through 2022, after which it goes down to 22% for 2023. In addition to federal tax credits, there are additional tax benefits offered by states for solar installation. These will change from state to state, so be sure to see what yours offers before you install your system.
Go Geothermal
Solar isn’t the only way to power your home. Given that it requires a certain amount of sun exposure to be effective, it’s not always an option that makes sense for every home. Geothermal heat pumps offer an alternative that draws power from the earth itself. The naturally occurring heat from our planet can be harnessed to warm homes and generate electricity. At the end of 2020, Congress extended the tax credits for geothermal systems. They currently match those for solar panel systems, with a 26% tax credit available through 2022 and 22% in 2023.
Going green and qualifying for tax benefits are both highly beneficial. When you buy an electric vehicle, install solar panels, or add a geothermal system to your home, you give yourself the opportunity to qualify. As with anything tax related, make sure you clearly understand what the rules and limitations are before you jump in. That will help you make the right moves to get the greatest benefits.
Worried about managing your investments? We can help you figure it out!
