2010 Home Tax Credits to Consider

Now is the time to sort out which 2010 tax credits are options for you and these may be located in your home. There are tax credits for certain home improvements, offices and more. Some of these tax credits may be opportunities to take advantage of before 2010 is over and they expire.

Energy Property 2010 Tax Credits

There are two energy property tax credits that should definitely be looked at for 2010 filing, the 'Nonbusiness Energy Property Credit' and the 'Residential Energy Efficient Credit'. The Nonbusiness Energy Property Credit is a combination of 2009 and 2010 qualifying home improvement purchases. It is figured at 30 percent of what you spend, up to a $1,500 tax credit. This means that only $5,000 of approved improvements, during both years combined, qualify towards the $1,500 credit.

Qualifying home improvements include insulation, heating systems, insulation, energy efficient windows and more. Any improvement that made your home more energy efficient may be on the list. The cost of installation is also included.

The Residential Energy Efficient Credit is for home owners who invested in alternative energy sources for their homes. This includes solar powered systems, geothermal, fuel cells and wind turbines. This credit is also figured at 30 percent of cost.

Not just any old home project qualifies for these credits. To discover if your home improvements qualify for these tax credits, check with the manufacturer for tax certification. This may have been included with purchase or you may have to contact them. If you are considering a purchase to take advantage of 2010's credits, check for tax certification before purchasing.

Form 5695, Residential Energy Credits, can be used to claim these deductions. If you are not sure your product qualifies, ask a professional tax preparer for advice.

Home Office Deductions
If you have a primary and exclusive space for business or meet clients set up in your home or on your property, you may qualify for home office tax credits. Qualifying expenses may include rent, utilities, dedicated phone lines and internet access.

Some deductions, such as electric, are figured in correlation to the percentage of space your office takes up within your home. Others are figured as outright expenses (printer paper) or by a depreciation system (some computers). IRS Publication 587, Business Use of Your Home, can help you sort through potential deductions.

Homebuyer's Tax Credit
Not only can the work done to your home and things inside it provide tax credits, but a newly purchased home may as well. If you bought a home between Nov. 30, 2009, and April 30, 2010, you may qualify for the Homebuyer's Tax Credit.

First-time homebuyers, those who have not owned a primary residence in three years, qualify for up to an $8,000 tax credit. The credit is figured at 10 percent of the purchase price.

If you bought a new home in this time period, but are not a first-time homebuyer, all hope may not be lost. If you have owned and lived in a home for five years in a row, you may also score a tax credit for 2010. This credit is for up to $6,500.

Sources:
'Expanded Recovery Act Tax Credits Help Homeowners Winterize their Homes, Save Energy' IRS.gov
'First-time Homebuyer Credit Extended to April 3o, 2010' IRS.gov