Tax season officially starts early next year, but there are a lot of tax-saving steps that must be taken by Dec. 31.
Some of the most lucrative ones come courtesy of the Inflation Reduction Act, which offers beefed-up tax credits to upgrade the energy efficiency of your home and for car buyers to electrify their vehicles. Other ones include the usual deductions for charitable donations, 401(k) funding and securities losses. If you’re a senior, you’ll also need to know the required minimum distribution (RMD) rules, which changed with Secure Act 2.0, or face steep penalties.
This may all sound complicated and time-consuming, especially with busy yearend holiday activities in the mix. So, we’ll break it down here for you so you can move quickly to take advantage of as many tax-saving moves as you can before time runs out.
What energy-efficient home improvements qualify for tax credits?
Improvements that may qualify for a tax credit include:
Home clean electricity products
◾ Solar panels for electricity from a local provider.
◾ Home backup power battery storage with a capacity of 3 kWh or greater.
Heating, cooling, and water heating
◾ Electric or natural gas heat pumps; electric or natural gas heat pump water heaters; central air conditioners; natural gas or propane or oil water heaters; natural gas or propane or oil furnaces or hot water boilers that meet or exceed the specific efficiency tiers established by the Consortium for Energy Efficiency.
