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Friday, September 24, 2010

"Last Chance! Don't Miss Out on the $1,500 Tax Credit!"

Overpaying $3,000
to Get Back $1,500?

I fielded a call this week from a client -- her mailbox filled with flyers touting the expiring $1,500 tax credit -- asking how much a forced air furnace should cost to heat her 1,700 square foot townhome.

My answer: anywhere from $3,500 to $4,500, depending on the make, capacity, and number of "bells and whistles."

Which is interesting, because the vendor she called -- in response to their ad pushing the $1,500 credit -- quoted her about $8,000.

I don't know that other vendors are doing this, but as always, it pays to shop around, and get multiple quotes.

Crying Wolf

Aside from the occasional overcharging contractor, vendors who've been bombarding the public with "Last Chance" ads have, I suspect, a "crying wolf" problem: even though the credit really does expire on December 31, they've been pushing the credit's "imminent" expiration for the better part of two years now (in other words, ever since it was enacted).

It's also the case that the federal tax credit is "up to $1,500"; if you read the fine print, it's actually 30% of the total outlay.

So, if you spend $4,000 on qualifying windows, a new furnace, etc., the total credit would be $1,200.

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