Dec-10-2018 - Using renewable energy or energy efficient equipment in the home has a number of advantages, but one that isn't widely publicized is the tax credit advantage. Homeowners who improve their homes in order to make them more energy efficient qualify for a federal residential energy tax credit. Although, there is a lot of misinformation as to whether the energy tax credit still exists; the good news is it still does. An online tax information and advice blog, File My Taxes Online just published a post shedding more light into the residential energy tax credit, how to claim it and what to do to qualify for it.
The Residential Energy Efficiency Property Credit is designed for solar energy, wind energy, and geothermal home improvements. It also applies to furnaces, energy efficient windows, and air conditioning systems but there are important restrictions on these systems. The residential energy tax credit will be available in its entirety until 2019. After 2019, its value is expected to rise until 2021, when it will need to be renewed or discontinued by Congress.
Like any other tax credit, the amount taxpayers can get back is still at 30%, with a decline until the tax credit expires after 2021. There is also no upper ceiling for how much homeowners can get back, but the credit for fuel cells is capped at $1,000 per kilowatt of power capacity. This implies that homeowners that install fuel cells with a power capacity of six kilowatts will get a tax credit worth $6,000.
Homeowners who would like to take advantage of the energy tax credit will need to add up their various energy credits on IRS Form 5965. After which they can now add it to the conventional Form 1040. File My Taxes Online recommends using TurboTax to claim the energy tax credit. TurboTax simplifies the process of filing Form 5695 as it only requires homeowners to fill in some numbers. It will then be able to provide at a glance how much can be claimed back from the government. TurboTax guarantees 100% accuracy and provides access to professional tax preparers who will personally review your tax return.
For more information about the federal residential energy tax credit, please read the full post on File My Taxes Online here - https://filemytaxesonline.org/what-is-energy-tax-credit/
About Frank Ellis
Frank Ellis is a Traverse City Tax Preparation Planner and published author. He has written tax and finance related articles for eight years and has published over 900 articles on leading financial websites.
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