Many people want to do something, however small, to contribute to a healthier
environment. There are many ways to do so and, for some of them, you can even save a
few tax dollars for your efforts.
Indeed, with the passage of the Protecting Americans from Tax Hikes Act of 2015 (the
PATH Act) late last year, a couple of specific ways to go green and claim a tax break
have been made permanent or extended. Let's take a closer look at each.
Not driving for dollars
Air pollution is a problem in many areas of the country. Among the biggest
contributors are vehicle emissions. So it follows that cutting down on the number of
vehicles on the road can, in turn, diminish air pollution.
To help accomplish this, many people choose to commute to work via van pools or using
public transportation. And, helpfully, the PATH Act is doing its part as well. The
law made permanent the requirement that limits on the amounts that can be excluded
from an employee's wages for income and payroll tax purposes be the same for both
parking benefits and van pooling / mass transit benefits.
Before the PATH Act's parity provision, the monthly limit for 2015 was only $130 for
van pooling / mass transit benefits. But, because of the new law, the 2015 monthly
limit for these benefits was boosted to the $250 parking benefit limit and the 2016
limit is $255.
Sprucing up the homestead
Energy consumption can also have a negative impact on the environment and use up
limited natural resources. Many homeowners want to reduce their energy consumption
for environmental reasons or simply to cut their utility bills.
The PATH Act lends a helping hand here, too, by extending through 2016 the credit for
purchases of residential energy property. This includes items such as:
- New high-efficiency heating and air conditioning systems,
- Qualifying forms of insulation,
- Energy-efficient exterior windows and doors, and
- High-efficiency water heaters and stoves that burn biomass fuel.
The provision allows a credit of 10% of eligible costs for energy-efficient
insulation, windows and doors. A credit is also available for 100% of eligible costs
for energy-efficient heating and cooling equipment and water heaters, up to a
lifetime limit of $500 (with no more than $200 from windows and skylights).
Doing it all
Going green and saving some green on your tax bill? Yes, you can do both. Van pooling
or taking public transportation and improving your home's energy efficiency are two
prime examples. Please contact us for more information about how to claim these tax
breaks or identify other ways to save this year.
This publication is distributed with the understanding that the author, publisher and
distributor are not rendering legal, accounting or other professional advice or
opinions on specific facts or matters, and, accordingly, assume no liability
whatsoever in connection with its use. The information contained in this newsletter
was not intended or written to be used and cannot be used for the purpose of (1)
avoiding tax-related penalties prescribed by the Internal Revenue Code or (2)
promoting or marketing any tax-related matter addressed herein. © 2016