One great way to maximize your tax refund is by investing the money you get into going “green.” In addition to lowering your carbon footprint, you can also save money and take advantage of numerous tax incentives. To help all of you looking to go “green” this tax season, I have composed the following list of the top ten ways to use your tax refund to help the planet.
1. New windows
If you do not have them already, installing energy-efficient, or double=paned windows can be a great way to use your refund. Not only will installing these new windows keep the cold out and the heat in, but you can also claim federal tax deductions for qualifying installations, if installed before December 31st of 2009. You can deduct 10% of the cost, up to $200 for all windows, skylights, and storm windows.
2. Hybrid Vehicles
The arrival of new and updated hybrids in 2009 also brings with it a round of new green auto deductions. If you purchase one of the new plug-in electric vehicles, you will qualify for a new tax credit, between $2,500 and $7,500, based on the battery capacity. Get them quick though, as phase-outs begin after the first 250,000 vehicles are sold. Additional credits are also available to qualifying hybrid and biodiesel vehicles manufactured after 2006, depending on their battery capability, manufacture date, and hybrid ability.
3. Replace your Lights
Replacing one older bulb with a newer, more efficient one can save you up to $350 throughout the light of the bulb! Replacing all lights in your home (or office) with new, energy efficient bulbs is a great way to spend your refund because it will also save you money in the future. Additionally, if you are remodeling a building and purchase more efficient lighting for it, you may even qualify for a deduction or credit for doing so.
4. Start a Garden
A lot of people have dreamed of having a garden of their own, but simply the time or money to do so. Using your tax return to fund this new endeavor is a great investment that you will not regret. Not only will having a garden of your own give you a new and free therapeutic activity, but you will now have a supply of fresh fruits and vegetables (if that is what you decide to plant) free of charge!
5. Green Mutual Funds
Much like other mutual funds, “green” mutual funds take your money and invest it in to other companies, hopefully giving you a good return on investment over time. What makes “green” mutual funds different is that they only invest your money in companies who actively benefit the environment with their products, have projects running that help the environment, or have clean and sustainable business modules.
6. Recharge and Save
More than 3 billion batteries are purchased, used, and thrown away by Americans every year. That is a lot of money, and a lot of trash. Purchasing batteries and appliances that are rechargeable is a great way to save money and do good for the environment at the same time.
7. Treat Your Kitchen
Purchasing new appliances for your home will help you save energy and money, as well as give your Kitchen a new look! You might be surprised at how much energy old microwaves, ovens, blenders, coffeepots, etc. waste compared to new efficient models. Remodeling your kitchen will all new appliances is a great “green” way to invest your refund, while also increasing the value of your property.
8. New Heater or A/C
Updating to a new air conditioning and heating system will benefit you in many ways, including a nice tax benefit. As long as your new a/c and or heater was placed in to service between Jan. 1st 2009 and Dec. 31st, you can claim a credit of $300, or possibly even more depending on the system you used. Check the IRS website for a full list of credit qualifying products.
9. Alternative Energy Stocks
If you like to play the stock game, and you love the planet, then you may be interested in investing in alternative energy stocks. It can be confusing if you are a beginner, but as the trend spreads there will be more information available. For now, check out sites like AltenErgyStocks.com for more ideas and tips.
10. Home State Incentives
While there are a lot of green Federal tax incentives for both the 2008 and 2009 tax year, there are also many States who offer “green” State tax incentives as well. Be sure to check your States website for more details, or speak to a local tax professional.
