Many people have heard of tax credits for energy efficient purchases. The good news is they extend to appliances as well. You can get a tax rebate and save money on your utility bill.
A tax credit is a very valuable thing and is much better than a tax deduction. A tax credit comes directly off the amount of taxes due rather than reducing your taxable income. The United States has recently approved some tax credits for the purchase of energy efficient homes and products. For the most part, these products are air conditioning and heating units and solar energy products. The tax credits for appliances are available for the manufacturers of washing machines, dryers, and refrigerators.
In order to qualify for tax credits, the manufacturer must be making washing machines or dryers that conform to 2007 Energy Star specifications. Refrigerators must exceed the 2001 energy conservation standards. This might come as a disappointment to the individual tax payer, but it really should not. The taxpayer stands to benefit from this tax break policy to manufacturers in two different ways.
First, by giving tax breaks to the manufacturers, it encourages them to meet Energy Star standards in order to qualify for them. In the long run, the consumer is the one who is benefiting from the Energy Star standards being met in major appliances. The rising cost of energy and the environmental concerns of high energy consumption are problems that touch every individual consumer. We really should not need any tax credit to encourage us to save money and the more Energy Star appliances on the market, the better for us.
The second way that individuals stand to benefit from tax breaks to the manufacturers is that by making their profitability higher, it encourages them to produce better products and still have the ability to offer them at more competitive prices. It is said that every appliance has two price tags. The first is the one we pay at the point of purchase and the second is the cost of operating the appliance during its lifetime. In a perfect world, everyone would understand this and refuse to settle for an energy inefficient product despite its lower initial cost. We do not live in a perfect world, however, and too many people make their buying decisions based only on that first price tag.
Also, do not forget the individual tax credits on heating and air conditioning units. These credits can be applied to individual tax returns and go up to $300 for certain approved units. People may be disappointed that their new Energy Star approved washer and dryer does not help reduce their income tax when April rolls around, but this is an extremely selfish point of view. The government sponsored Energy Star program already is working to save us money on energy costs and each of us has a stake in the environmental concerns too. It should not be necessary to bribe us via tax credits to make sound financial and environmental decisions when shopping for a major appliance.
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