3 Ways to Go Green (and Save on Taxes)
April 25 2019
In this day and age, you can’t avoid hearing about the environment, whether you’re watching a presidential debate or just walking down the street. It’s time to go green.
However you personally choose to keep the world around you clean and healthy, you have to admit that being a good steward of Mother Nature just feels good sometimes.
But “going green” doesn’t have to mean simply recycling. As a matter of fact, making smart, eco-friendly changes to your home and lifestyle can put a lot more green in your pocket when it’s time to file your taxes. And hey, more money feels good, too—right?
It’s time you go green and save big. From small to massive ones, there are a ton of eco-friendly changes you can make this year to save on your taxes next April.
3 Ways to Go Green—and Save
There are plenty of ways you can lower your tax bill while helping the environment, but we’ve outlined the biggest and most popular. We’re going to get you started with your green tax savings by recommending three things: renovating your home, recycling electronics, and buying an electric car.
1. Renovate Your Home
Whether you’re planning to stay in your home for years to come or planning to move next year, there are ton of benefits that come with implementing energy-efficient measures into your home! Energy-efficient renovations can lower your bills over time and improve the value of your home when you choose to sell.
The IRS provides a number of tax breaks and tax credits for taxpayers looking to make green changes to their home. Probably the most well known program is the EPA’s Energy Star program. Full disclosure: Some of these tax breaks expired in 2011. However, other credits will still be accessible through 2021. In either case, you’ll feel the financial boost right away—just as soon as your water and power bills arrive.
Additionally, check out the Residential Renewable Energy Tax Credit, which apply to the installation of products like solar panels, solar-powered water heaters, wind turbines, and fuel cells that rely on renewable resources. You can earn a credit of up to 30% of the cost (including installation).
2. Recycle Your Electronics
Electronics come with a shelf life. New models of TV, computers, printers, and other products roll out nearly every day and can suddenly make your current model obsolete. Unfortunately, electronics are both a pain and a waste to throw out.
Planning to upgrade? Avoid the tempting instinct to ditch your old electronics on the curb or toss them in the dumpster. If you want to make an impact on your taxes, skip selling them on Craigslist and turn that $75 into tax savings by donating it to a charity or a recycling company.
You can deduct most household items, including TVs and other electronics, when you donate them to 501(c)(3) groups. Organizations like Goodwill and many nonprofit recycling companies. (Just make sure it’s actually a nonprofit organization before you donate, and you may be able to deduct the item’s estimated value.)
3. Buy an Electric Car
Gas prices are too damn high, and the rising interest in electric cars is a huge testament to that. The federal government and many states provide tax credits and other financial incentives for taxpayers who take the leap and purchase an electric car, or EV.
From the IRS, you can expect a tax credit ranging from $2,500 to $7,500 for each EV purchased. That tax credit varies based on the vehicle’s size and its battery capacity. Make sure to research the make of car you’re planning to buy, though, because this tax credit is limited and phases out for each manufacturer once 200,000 qualified electric cars from that manufacturer have been sold. (That limit has not been reached yet.)
You can also check your state or local municipality to see they offer other incentives for electric cars. Registration fee reductions, vehicle rebates, and other exemptions are often available.
Read up on the Department of Energy’s additional rules and incentives surrounding EVs on their website.
Go Green, Save the Earth, and Save on Taxes
Your taxes and the environment are much more related than you think. With smart, thoughtful choices, you can lower your tax bill while lowering your carbon footprint.
Of course, some of these changes may not feel as tangible as picking up litter or tossing an aluminum can in the recycling bin rather than the trash. But they’re sure to help save you money in the short term, and benefit Mother Nature in the process. And that’s a shade of green we love.
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