Can a homeowner use the entire $1500 limit as a credit

toward the installation of one appliance?

Yes.

A homeowner may use the entire $1500 in tax credits for installing a single appliance, such as a qualified furnace, air conditioner, heat pump or hot water heater. If the home owner does not use all of the $1500 they can "bank" the remaining available tax credit for other qualified improvements.

What's the difference between a tax credit and a tax deduction?

As a tax credit applies against the taxpayers' liability. A tax deduction applies against a taxpayer's income. lowering the adjusted gross income and possibly moving the taxpayer to a lower tax bracket. Tax credits have a greater benefit to a taxpayer.

Type: Financial  Contact   ^top         < Prev   Current   Next >   of 13   Posted: 03/03/09     ID: 1236112384 # 1236112384