How To Get A Tax Deduction For Offsetting Your Carbon Footprint

Why Offset Your Carbon Footprint?

If you care about climate change or the environment, you may be interested in offsetting your carbon footprint. A carbon offset is an action intended to compensate the carbon emissions of a human activity. If you have already been tracking your household finances, calculating the carbon emissions of your household should be pretty easy. If not, it’s still totally worth doing.

How Do I Offset My Household Carbon Footprint?

Lucky for you I did a bunch of research on this topic so you don’t have to. Just follow my guide.

  1. Calculate your Carbon Footprint:

There are a bunch of Carbon Calculators out there for this purpose. I used this individual carbon footprint calculator. The calculator will go step by step to include consumption areas like: household electricity consumption, flights, and food- it’s pretty inclusive.

2. Purchase Offsets

I did some research on reputable carbon offset programs and landed on Gold Standard. The Mission of Gold Standard is, “To catalyze more ambitious climate action to achieve the Global Goals through robust standards and verified impacts”. Gold Standard highlights organizations from around the world that reduce carbon emissions or remove carbon from the atmosphere. Purchase Carbon Offsets from Gold Standard here.

Your Carbon footprint will be calculated in tons. The average American creates about 16.49 tons of CO2 per year. The lowest cost Project on the Gold Standard website costs $10 per ton- a wind power project in Turkey that reduces emissions by 31,847 tons of CO2 Annually. Choosing to support this project while simultaneously offsetting the average American Annual Carbon Footprint would cost only $170. If you’re on the FIRE path, your household footprint is likely far less than the average American household.

3. Get The Tax Deduction

For the 2021 year you can claim $300 of cash donations per person or $600 for a couple without having to itemize your deductions. Because Gold Standard is a nonprofit- contributions to them qualify for the tax deduction.

It Feels Great!

We started offsetting our household and business carbon in 2020 and man it feels good! Right at the core of most of my life decisions is the question, “how can I do better for the planet?” The FIRE path has been great for this. Spending less means we are reducing our consumption and reducing our waste. And now we are offsetting our carbon footprint while maximizing our tax deduction- it’s pretty freaking awesome!

Just Do It Already!

Don’t let any of these steps stop you. If offsetting your carbon footprint and contributing to some amazing programs that are making the world a better place is something you want to do- just do it. If you don’t have time to calculate your footprint, just take the average American carbon footprint and offset 17 tons this year. You won’t regret it.

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