Should You Become A "Serial Home Remodeler"?
Welcome to Saving Money with Andrew!
The shrewdly-named Inflation Reduction Act has inspired a lot of debate. But rather than discuss its merits, I’m going to flag a change, highlighted in a superb WSJ article, that will could benefit several million Americans starting next year.
Starting in 2023, the Act dramatically expands the federal tax credit for home energy efficiency improvements, from a stingy 10% (with a $500 lifetime cap) to a generous 30% (with a $1200 annual cap, lower for certain improvements) for the next decade. And the menu of items that can qualify for this credit is very broad, including things one might not think of as potentially eligible, including new windows, doors, skylights, water heaters, and many other improvements.
These changes significantly affect the math for whether certain improvements are worthwhile. Notably, in our case in recent months we had a home energy audit, and installed new insulation, a skylight, and a new chimney liner. We also decided not to install solar panels. Each of these would be potentially eligible for a generous credit under new sections of the Act.[1]
And what’s great about this is that although there is a total cap on the credit, it is an annual cap, meaning that you can become a “serial” home remodeler (as the WSJ article mentions). It’s already mid-August, so you can start planning now and have work done right after the new year.
With an additional $1200 savings, and the cost of some home improvements starting to level off as construction and home improvement slow down, the math changes on a lot of money-saving and environmentally-friendly investments.
And now, Andrew’s pick(s) of the week:
The always-interesting Ted Gioia has 10 unconventional public speaking tips.
An interesting policy question—during the pandemic, the federal government suspended eligibility rules, “[giving] every student a free breakfast and lunch regardless of family income”. This fall, school breakfast and lunch returns to full-price, unless the student’s family applies for free/reduced-price meals. In pre-pandemic times, the school lunch program served about 5 billion lunches per year, with about three-quarters of them free or reduced price and the remainder about $3. Sure, families that can afford it should pay, but how many needy students are going to be denied food because their family fails to apply? Would it make sense to keep things simple and make the program free for all?
Also interesting, the Most Streamed Spotify Songs Of All-Time:
Great NYTimes piece about the impact of inflation on restaurant prices: That Dinner Tab Has Soared. Here Are All the Reasons.
Times are tough for mass transit in NYC: New York’s MTA Shops for New Funding as Fare Revenue Dwindles. Maybe it’s time for congestion pricing?
I hope this has been helpful. If you liked it, please share it on social media! Also, please send me your feedback, requests, and success stories.
[1] Note that the rules are fairly complicated, and different items have different limits and (in certain cases) different effective dates and credits. Consult your accountant or do more research before committing to anything.