Happy Earth Day 2017!
Maybe you're spending this Saturday simply out enjoying the beauty of Mother Earth. Or perhaps you're participating in the March for Science (the main event in D.C. or satellite marches across the country) to support scientific efforts, including the study of climatology and climate change.
Regardless of how you acknowledge Earth Day, thank you for thinking of our planet.
In recognition of your commitment to protect and preserve the only place we humans and other creatures have (so far) to live, here are 7 tax saving options that reward energy and environmentally friendly efforts.
Let's start with travel.
Using mass transit instead of driving to and from work is a great way to reduce carbon emissions.
If you commute by (1) mass transit, you may qualify for a $255 per month tax break to help cover your transit pass. The amount is adjusted for inflation each year. This pre-tax benefit pays for the transportation pass, token, fare card, voucher or payment system granting you access to bus, rail or ferry systems.
You say that public transportation options in your area aren't the best, but you do your part by (2) bicycling to work. Good for you. See if your workplace offers (or you can convince your boss to offer) a tax break for your two-wheeled commute. Like the mass transit benefit, this pre-tax money of up to $20 per month that your commute on your non-motorized bike. It also covers other bicycle expenses, such as the vehicle's purchase, upkeep and storage.
If, however, you just can't let go of your steering wheel, consider an (3) electric vehicle. Uncle Sam can help here. A federal tax credit of up to $7,500 is available when you buy an electric auto. As happened years ago when a tax break was provided for hybrid autos, the electric vehicle credit phases out once the manufacturer sells 200,000 of the plug-in vehicles.
Now let's head home by your preferred transportation method.
As you know by now (since I've blogged about it before, most recently in my spring energy tax breaks post), the possible $500 federal tax credit for a variety of (4) energy efficient home improvements expired at year-end 2016. But if you got an extension to file your 2016 tax return last week and qualify for the tax credit for some of residential energy upgrades (for example, insulation, new doors or windows, or a replacement roof), be sure to claim them.
The (5) Residential Energy Efficient Property Credit, however, remains in the tax code through 2021. It's worth a 30 percent tax credit (through 2019; it's reduced a bit in 2020 and 2021) of the cost of solar-powered systems, such as sun driven water heaters and photovoltaic panels that produce a house's electricity. EnergyStar.gov has details on the tax benefits of installing these environmentally friendly systems. Note: the other alternative energy systems that offered this 30 percent tax credit — small wind energy property, geothermal heat pumps and fuel cell systems — also expired at the end of 2016.
It's also better to give than to take tax-wise when it comes to the environment.
You can make (6) charitable donations to environmental nonprofits to help them achieve their goals and claim a deduction for your gift.
If you don't have a favorite, just Google "environmental nonprofits" and get ready to be overwhelmed by how many green causes are out there.
You also can search the green giving groups listed in GuideStar and Charity Navigator. If you have the name of a group and want to make sure it's IRS-approved since that's one of the tax deduction rules you must follow, you can check the tax agency's official Exempt Organizations Select Check online search tool.
Or since this Earth Day also is the national March for Science, you can give to 501(c)(3) groups that support scientific research.
Finally, take the oft-repeated phrase "think globally, act locally" to heart when it comes to environmental and energy saving situations and related tax breaks.
There are myriad tax credits, rebates and other government-subsidized energy-related savings at the (7) state and local levels. You can find many of them in the directory at DSIRE, the acronym for Database of State Incentives for Renewables & Efficiency.
The site, according to its "About" Web page, is the most comprehensive source of information on incentives and policies that support renewable energy and energy efficiency in the United States. It's been around since 1995, is operated by the North Carolina Clean Energy Technology Center at North Carolina State University and is funded by the U.S. Department of Energy (DoE).
There's also Energy.gov, which as its .gov suffix indicates is a DoE project. On that Web page, you can search for money-saving programs that promote energy efficiency and renewables, either nationally or by state.
I hope you have enough energy left after celebrating this Earth Day to check out these environmentally conscious tax savings. It's the least that you deserve for working to keep Mother Earth healthy.
You also might find these items of interest:
- China's new pollution tax excludes greenhouse gases
- Sweden looks at taxes to reduce wasteful consumerism
- Former Treasury chief calls for global climate change action