Don't Mess With Taxes

Earth Day 2024 is tomorrow, April 22. But today is so nice — we finally got some rain, and the butterflies and hummingbirds are taking over our backyard — that I decided to celebrate a day early.

This special day dedicated to the ecological issues facing our planet was first held on April 22, 1970. Back then, San Francisco activist John McConnell and Wisconsin Senator Gaylord Nelson came up with the idea separately. But they agreed that Americans should join en masse in grassroots demonstrations to highlight environmental threats.

McConnell wanted Earth Day events to happen on March 20, which that year was the spring equinox. But Nelson preferred April 22, and that ended up becoming the official celebration date since the spring equinox changes over time.

The choice worked.

Fifty-four years ago on April 22, around 20 million Americans (10 percent of the population at the time) ventured outdoors and protested together for more environmental protection efforts. At that time, Americans were focused on toxic drinking water, air pollution, and the effects of pesticides.

And Washington, D.C., actually listened.

Environmental policies, then and now: President Richard Nixon established the Environmental Protection Agency (EPA) as an independent agency within the executive branch, effective Dec. 2, 1970. On the new agency's heels came passage of the Clean Air Act, the Clean Water Act, and the Endangered Species Act.

Now, more than half a century later, another White House administration is again is pushing environmentally friendly policies. President Joe Biden's Inflation Reduction Act (IRAct) contains myriad energy policy provisions. They include, of course, tax breaks for both businesses and individuals.

Biden touched on some of the IRAct's measures, and other environmentally friendly laws, in his Earth Day 2024 Proclamation:

     "Through the Inflation Reduction Act, we are building a clean energy economy that creates good-paying jobs and investing in research and development here at home.  We are building a cleaner, more resilient power grid; expanding solar, wind, nuclear, and geothermal power; and upgrading the transmission system to bring clean electricity to more communities.  We are saving families hundreds of dollars per year on their electric bills by providing tax credits to invest in efficient electric heat pumps.  We are providing thousands of dollars in tax credits to people who buy new or used electric cars.  Additionally, we are supporting farmers and ranchers in the adoption of climate-smart practices like cover crops and rotational grazing to reduce greenhouse gas emissions.

     Meanwhile, our American Rescue Plan has also helped States and cities become more energy efficient and resilient to extreme weather, including helping people weatherize their homes, restoring wetlands to protect against storm surges and flooding, and opening cooling centers where people can stay safe from extreme heat.  We have also made America’s biggest investment in infrastructure in generations.  As a result, we are expanding our transit and rail systems to reduce traffic and emissions, and we are building a national network of 500,000 electric vehicle charging stations."

Home energy upgrades and tax benefits: The hubby and I personally benefited, both from the home comfort and tax perspectives, from the home-related tax breaks. We were able to claim the now-dubbed Energy Efficient Home Improvement Credit in connection with our new air conditioning unit and replacement windows.

The federal tax savings of up to $3,200 a year for energy efficient upgrades are available through 2032. So, by staggering your home's energy improvements, you can spread out eligible upgrades over the tax break's life and maximize your house updates and tax savings.

Plus, many states and more-local jurisdictions (and power companies) also provide rebates for such changes.

Federal energy tax breaks: Of course, it's not that simple. Remember, Congress was involved, so the $3,200 tax credit about is divided into credit categories with smaller limits. The maximum credit you can claim each year, with further caps within the categories, are:

• $1,200 for any combination of what are known as home envelope improvements, such as certain doors ($250 per door and $500 total), windows ($600) and home energy audits ($150); and
• $2,000 per year for qualified heat pumps, biomass stoves or biomass boilers.

You can read more about these and other options in my prior federal energy tax credit posts —

• Save some tax green by going greener at home
• Use federal home energy tax credits to fight the heat
• A home energy audit could produce lower utility bills and a tax credit
• Alternative energy home upgrades could net you utility and tax savings
• Heat pumps get special tax break in Inflation Reduction Act's home energy enhancements

On the state level, check out PACE-ing your energy usage.

The Energy Star program also has a Home Upgrade online guide that can help you find incentives, buying guidance, and information on eligible products, as well as links to local retailers and installers, so you plan the upgrades that make the most sense for your home.

And in a related home beautification effort that could save you tax money when you sell your residence, check out my home landscaping and tax tips offered on a prior Earth Day.

Tallying Earth Day's benefits and numbers: All the tax break provisions and considerations, the history of Earth Day and Uncle Sam's subsequent response, and all the data compiled by EarthDay.org in support of events on April 22 and every day, offer a plethora of figures that could qualify as this weekend's By the Numbers selection.

But, unlike too many tax laws, I'm going to keep it simple. The By the Numbers choice is April 22.

And I'm closing this post with a photo I took earlier this month of bluebonnet fields at Muleshoe Bend northwest of Austin.

Bluebonnet fields at Muleshoe Bend in Central Texas. (Photo by Kay Bell)

This magnificent display by Mother Nature of Texas' state flower shows that taking care of our world is important not just for survival reasons, but also for the pure enjoyment of the time we are allowed to spend on this planet.

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