With another Tahoe winter looming just around the corner, it’s easy to picture the majestic snow-dusted trees, skiers and boarders carving the mountainsides, children building snowmen……and the costly heating bills!

Luckily, there is some heating expense relief this year thanks to the Economic Stimulus Bill.  But you have to act fast—the heating-related tax credit expires December 31, 2010.  By making qualified heating and air upgrades before the end of the year, homeowners can claim a tax credit of up to 30% of the costs to a maximum of $1,500.00.

The best part is, the savings is two-fold.  “Homeowners can reduce their taxes by the amount of the tax credit.  Plus, by purchasing an energy efficient heating system, you’ll also reduce utility bills.  It’s a win-win situation,” says Jared Davis, licensed contractor and owner of A Degree Above Heating and Air.  Of course, there’s the added environment-friendly aspect of reducing fossil fuel consumption.

The tax credit is part of The American Recovery and Reinvestment Act of 2009 (The Economic Stimulus Bill) signed into law by President Obama on February 17, 2009.  The tax credits are retroactive to January 1, 2009 and expire on December 31, 2010.  You are eligible for a total of $1,500.00 in tax credits for qualifying improvements made in the combined two year period of 2009 and 2010.  Homeowners that previously claimed tax credits in 2006 or 2007 are still eligible to claim the full $1,500.00.

The credit applies to new high-efficient air conditioners, heat pumps, furnaces, boilers, and water heaters.  Be careful not to buy just any new piece of equipment, though.  “To qualify, the equipment and improvements must meet certain efficiency standards.  You should make sure to check with a licensed professional before you purchase anything,” Jared Davis advises.

The best place to start is with a home heating inspection.  Many local companies offer free consultations. As the credit applies to the installed cost of the qualified equipment, labor is included.

The IRS has directed taxpayers to use Form 5695 to claim the credit and to keep complete records of their installation and home improvements.  Visit www.IRS.gov for more information.

It just goes to show that you can spend to save….upgrade to energy efficient and save money on your taxes, conserve fossil fuels, and put extra money in your pocket with each utility bill.  Stay warm this winter!