Facts on the Energy-Efficiency Tax Credits:

Take advantage of improved tax credits available for a number of energy-efficient home improvements. The Existing Home Retrofit Tax Credit (Tax Code Section 25C): Tax credits are available at 30 percent of the cost, up to a $1,500 lifetime limit, for installation in 2009 & 2010 (for existing homes only) of these products:Building envelope components (Installation costs not included):

• Insulation material or system
• Exterior window, skylight, door, storm window or storm door with a U factor of .3 or below
• Metal or asphalt roofs that resist heat gain

Qualified energy products (Installation costs may be included):

• Electric heat pump water heaters that yield an energy factor of at least 2.0 in the standard Department of Energy test procedure.
• Electric heat pumps and central air conditioners that achieve the highest efficiency tier established by the Consortium for Energy Efficiency as of Jan. 1, 2009.
• Natural gas, propane or oil water heaters with an energy factor of at least .82 or thermal efficiency of at least 90 percent
• Biomass burning stoves with a thermal efficiency rating of at least 75 percent as measured using a lower heating value
• Natural gas and propane furnaces that achieve an annual fuel utilization efficiency rate of not less than 95
• Natural gas, propane, or oil water boilers and oil furnaces that achieve an annual fuel utilization rate of not less than 90
• Advanced main air conditioning fans with annual electricity use of no more than 2 percent of the total annual energy use of the furnace

The Wind, Solar, Geothermal and Fuel Cell Tax Credit (Tax Code Section 25D): Tax credits are available at 30 percent of the cost, with no cap through 2016, for existing homes and new construction, for:

• Geothermal Heat Pumps
• Solar Panels
• Solar Water Heaters
• Small Wind Energy Systems
• Fuel Cells

The energy-efficiency home products must be “placed in service” between Jan. 1, 2009 and Dec. 31, 2010. The credits are only valid for improvements made to the taxpayer's principal residence, except for qualified geothermal, solar, wind property, which can be installed on any home used as a residence by the taxpayer.

IRS Clarifies What Qualifies for Home Owner Energy Tax Credit

The Internal Revenue Service has published new guidance on Internal Revenue Code Section 25C, which allows up to a $1,500 tax credit for home owners who install energy-efficient windows, insulation and other qualifying products. The tax credit is equal to 30 percent of the qualified energy efficiency expenses paid by the home owner, but it is limited to $1,500 for improvements made during 2009 and 2010.
Among the highlights:

• Tax credit eligible products must be reasonably expected to remain in use for at least five years. One method taxpayers can rely on to satisfy this requirement is to purchase products from a manufacturer who offers a warranty lasting at least two years at no additional cost.
• Not all Energy Star-rated products that are installed qualify for the tax credit. The Energy Star Web site includes a detailed listing of products that qualify for the section 25C program.
• The credit excludes installation costs for building envelope components — such as insulation and windows. In order for the home owner to claim the credit, the remodeler must provide an itemized breakout of the cost of these installed products, minus any labor or installation charges.
Contact your tax professional for further details.

Think Twice Before You Remodel

Embarking on a home project without the needed expertise can be very expensive and have a negative effect on home equity.

Stop! Think about What You’re Doing

What has caused this influx of weekend-warrior DIYers? Some blame ABC’s Extreme Home Makeover; others the Discovery channel’s Monster House (you can completely renovate your home into an English pub, Australian Outback or space station in five days!) and then there is the DIY network channel that shows how-tos from electrical work to room additions to fireplace installations all in 30 minutes. The possibilities are endless…

Can you really tear out a wall and install a fireplace with chimney in 30 minutes? The laws of physics, remodeling and Elmer’s glue say “no.”

“One thing all DIYers need to know is that television shows pay an army of professional remodelers who sit off camera to plan out projects for the actors (hosts) and stand by coaching as the show is taped,” says Arthur Kriens, CGR of Kriens Construction Co. Inc., in Sioux Falls, SD. “DIY shows are not realistic, just as movies take artistic license. That is why it is called entertainment.”

While most professional remodelers do not frown on some DIY work, all believe that many jobs should be left to professionals.

“The rule of thumb that I always live by is if a handyman service in your area such as 1-800-handyman, etc. can do the project then odds are, a good do-it-yourselfer can do it themselves,” says Bob Birner, CGR, CGB of Amazing Siding Corp. in Houston. “If they don't do it, then that is a good sign of needing a professional. We as remodelers wouldn't perform open heart surgery on a loved one without medical expertise. Remodeling is open-heart surgery for the home - only professionals should attempt.”

Still think you can tackle a big remodeling project? Bob Van Cleef, CGR, CGB, GMB, owner of Yankee Housewrights in Jamestown, R.I. cautions all motivated DIYers to ask themselves a few questions:

• Have you ever done this before?
• Can you dial 911 when you are bleeding?
• How much money will you really save? (To get a true sense of actual costs of a project, take what you think it will cost in time and money and multiply by three.)

“A person needs to look at a project and what can happen in the worst case scenario and ask, if it came to a disaster can they deal with that and will they know how to fix it? Also, can your marriage survive a disastrous remodel? If you answer no, then hire a pro,” says Van Cleef.

Van Cleef and other professionals admit that when it comes to repairs and remodeling their own homes they hire professionals to do it. “I have been in construction my whole life and I still hire a pro to do work at our house because there are certain things even I wouldn’t touch such as electrical, plumbing and framing,” says Van Cleef.

Projects for Dummies
Because not all men or women are created equal, there are some projects the professionals believe can be tackled by DIYers (the outcome will depend on skill level) such as, hanging pictures, interior painting (if you have a week), changing door knobs and cabinet pulls and some aesthetic work such as installing crown moulding (but only if you are really good!).

If you are willing to put the time and energy into a do-it-yourself home remodel, Barbara Rose Peck, co-owner of S.N. Peck Building, Inc. and Case Handyman Services of Chicago advises:
• Follow product directions. Read everything that comes with the product and take it seriously.
• Get a detailed, illustrated home repair and maintenance book.
• Do very careful and thorough preparation: Set everything up and protect surrounding surfaces.
• Practice with the tools.
• Follow safety procedures and use proper safety equipment.

But beware of taking on more than you are capable of doing both in time and skill. “The biggest mistake the weekend handyman makes is to take on a project larger than he can handle in a reasonable amount of time,” says Douglas Nelson, CR, CGR of New Spaces in Burnsville, MN. “I have talked with people who have been remodeling their kitchen for more than two years. Can you imagine not having a kitchen for two years? This is divorce court time.”

Extreme Home Makeover

While careful attention to detail and directions can help a DIYer with a successful remodel, the National Association of Home Builders Remodelors Council warns against non-professionals attempting certain jobs because of the damage and life-threatening risk these projects can create. The following project should only be done by professionals:

• Electrical – unless you are a licensed electrician do not attempt to rewire their home. If done improperly you can burn down your house.

“We investigated an electrical short in a bathroom fixture not too long ago and found that the homeowner had nailed down some plywood sheets in the attic for storage even though the electrical wires were in the way,” says Mike Dukate, CGR, CAPS, CGB of Dukate Fine Remodeling in Franklin, Ind. “One nail actually split the wire, making contact with the hot feed and the neutral wire and the nail became a heating element whenever the bathroom light was turned on and charred the wood all around it, it was just a matter of time before a fire started.”

• Structural Changes – do not remove or add any walls or cut holes into the roof, you run the risk of compromising the structural integrity of your home and having a really big hole in your roof.

“Once we were unable to take on the repairs of a bathroom job because the homeowner and a handyman took on a master bedroom addition project and created major plumbing, tile and other aesthetic and structural problems,” says Kimberly Bednar of Plekkenpol Builders, Inc., in Bloomington, Ind. “The work had so badly disturbed the area that we were not comfortable with giving a warranty on our work without completely starting from scratch – removing and replacing the addition and all plumbing, including the fixtures.”

• Plumbing – moving pipes can cause a swimming pool in your home at anytime.

“We had a plumbing situation one time where the plumbing drain pipe from the kitchen sink was installed so the water had to run uphill,” says Kriens. “The sink always was slow to drain. This DIY fix-it was discovered by the second homeowner, who sued the first homeowner after he had to pay $25,000 for the entire kitchen to be redone.”

While many projects look manageable in product fliers there is a difference between what is spent and the “real” cost generated on a project. Many of the products purchased for the DIY market, although designated by a name brand, are not always the same quality available to contractors. Also, many warranties become void by improper installation. If projects are done incorrectly, homeowners can end up with their own Extreme Home Makeover whether intended or not.

“An old trade contractor of mine always said, ‘It is hard to beat a man at his own trade.’ And there is a lot of truth to that,” says Don Novak, CGR, CAPS, GMB of Novak Construction Co in Cedar Rapids, Iowa. “Most people discover that their estimate of how long a project will take is soon shaken when they realize they have bitten off more than they can chew. Usually it costs more for a good remodeler to undue any damage than it would have to hire the professional in the first place and forgo the ‘I told you to hire a contractor, but NO you wouldn’t listen.’”

Remember, DIY projects should be fun. If you don't see it as fun, then DDIY (don't do it yourself). If you have already created a DIY disaster that needs fixed or you value your time and money, hire a professional to do the work.