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2 Tax Credits Available for Certain Energy-Efficient Home Improvements

March 21, 2012 by · Leave a Comment

Hot From the IRS News Room…….

Energy Efficient Tax Credits

TWO TAX CREDITS AVAILABLE FOR CERTAIN ENERGY-EFFICIENT HOME IMPROVEMENTS

Perhaps you installed solar equipment or recently insulated your home? Here are two tax credits that may be available to you:

1. The Non-business Energy Property Credit Homeowners who install energy-efficient improvements may qualify for this credit. The 2011 credit is 10 percent of the cost of qualified energy-efficient improvements, up to $500. Qualifying improvements include adding insulation, energy-efficient exterior windows and doors and certain roofs. The cost of installing these items does not count. You can also claim a credit including installation costs, for certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass fuel. The credit has a lifetime limit of $500, of which only $200 may be used for windows. If you’ve claimed more than $500 of non-business energy property credits since 2005, you cannot claim the credit for 2011. Qualifying improvements must have been placed into service in the taxpayer’s principal residence located in the United States before Jan. 1, 2012.

2. Residential Energy Efficient Property Credit This tax credit helps individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, solar electricity equipment and wind turbines. The credit, which runs through 2016, is 30 percent of the cost of qualified property. There is no cap on the amount of credit available, except for fuel cell property. Generally, you may include labor costs when figuring the credit and you can carry forward any unused portions of this credit. Qualifying equipment must have been installed on or in connection with your home located in the United States; geothermal heat pumps qualify only when installed on or in connection with your main home located in the United States.

Certified Energy Efficient

Not all energy-efficient improvements qualify so be sure you have the manufacturer’s tax credit certification statement, which can usually be found on the manufacturer’s website or with the product packaging.

If you’re eligible, you can claim both of these credits on Form 5695, Residential Energy Credits when you file your 2011 federal income tax return. Also, note these are tax credits and not deductions, so they will generally reduce the amount of tax owed dollar for dollar. Finally, you may claim these credits regardless of whether you itemize deductions on IRS Schedule A.

>>>>TWO TAX CREDITS AVAILABLE FOR CERTAIN ENERGY-EFFICIENT HOME IMPROVEMENTS<<<<

 ENERGY-EFFICIENT TAX CREDITS

MAXIMIZE YOUR CREDITS

BE SURE TO HIRE A TAX PROFESSIONAL TO MAXIMIZE YOUR REFUND

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Four Tax Credits that Can Boost Your Refund

March 11, 2012 by · Leave a Comment

Hot From the IRS News Room…….

REFUNDABLE TAX CREDITS

Four Tax Credits that Can Boost Your Refund

REFUNDABLE CREDITS

 PUT CASH IN YOUR POCKET

BE SURE TO HIRE A TAX PROFESSIONAL TO MAXIMIZE YOUR REFUND

A tax credit is a dollar-for-dollar reduction of taxes owed. Some tax credits are refundable meaning if you are eligible and claim one, you can get the rest of it in the form of a tax refund even after your tax liability has been reduced to zero.

Here are four REFUNDABLE tax credits you should consider to increase your refund on your 2011 federal income tax return:

1. The Earned Income Tax Credit is for people earning less than $49,078 from wages, self-employment or farming. Millions of workers who saw their earnings drop in 2011 may qualify for the first time. Income, age and the number of qualifying children determine the amount of the credit, which can be up to $5,751. Workers without children also may qualify.

CHILD TAX CREDIT

2. The Child and Dependent Care Credit is for expenses paid for the care of your qualifying children under age 13, or for a disabled spouse or dependent, while you work or look for work.

3. The Child Tax Credit is for people who have a qualifying child. The maximum credit is $1,000 for each qualifying child. You can claim this credit in addition to the Child and Dependent Care Credit.

4. The Retirement Savings Contributions Credit, also known as the Saver’s Credit, is designed to help low-to-moderate income workers save for retirement. You may qualify if your income is below a certain limit and you contribute to an IRA or workplace retirement plan, such as a 401(k) plan. The Saver’s Credit is available in addition to any other tax savings that apply.

REFUNDABLE CREDITS

 PUT CASH IN YOUR POCKET

BE SURE TO HIRE A TAX PROFESSIONAL TO MAXIMIZE YOUR REFUND

There are many other tax credits that may be available to you depending on your facts and circumstances. Since many qualifications and limitations apply to various tax credits, you should always hire a Tax Professional.

>>>>Four Tax Credits that Can Boost Your Refund<<<<

REFUNDABLE CREDITS

 PUT CASH IN YOUR POCKET

BE SURE TO HIRE A TAX PROFESSIONAL TO MAXIMIZE YOUR REFUND

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Six Tips on a Tax Credit for Retirement Savings

March 7, 2012 by · Leave a Comment

HOT FROM THE IRS NEWS ROOM

HOT FROM THE IRS NEWS ROOM…

SIX TIPS ON A TAX CREDIT FOR RETIREMENT SAVINGS

If you make eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement, you may be eligible for a tax credit, depending on your age and income.

Here are six things the IRS wants you to know about the Savers Credit:

1. Income limits The Savers Credit, formally known as the Retirement Savings Contributions Credit, applies to individuals with a filing status and 2011 income of:
• Single, married filing separately, or qualifying widow(er), with income up to $28,250
• Head of Household with income up to $42,375
• Married Filing Jointly, with incomes up to $56,500

2. Eligibility requirements To be eligible for the credit you must be at least 18 years of age, you cannot have been a full-time student during the calendar year and cannot be claimed as a dependent on another person’s return.

3. Credit amount If you make eligible contributions to a qualified IRA, 401(k) and certain other retirement plans, you may be able to take a credit of up to $1,000 ($2,000 if filing jointly). The credit is a percentage of the qualifying contribution amount, with the highest rate for taxpayers with the least income.

ARE YOU MAXIMINZING YOUR RETIREMENT

4. Distributions When figuring this credit, you generally must subtract distributions you received from your retirement plans from the contributions you made. This rule applies to distributions received in the two years before the year the credit is claimed, the year the credit is claimed, and the period after the end of the credit year but before the due date – including extensions – for filing the return for the credit year.

5. Other tax benefits The Retirement Savings Contributions Credit is in addition to other tax benefits you may receive for retirement contributions. For example, most workers at these income levels may deduct all or part of their contributions to a traditional IRA. Contributions to a regular 401(k) plan are not subject to income tax until withdrawn from the plan.

6. Forms to use To claim the credit use Form 8880, Credit for Qualified Retirement Savings Contributions.

There are many other tax credits that may be available to you depending on your facts and circumstances. Since many qualifications and limitations apply to various tax credits, you should always hire a Tax Professional.

>>>>Six Tips on a Tax Credit for Retirement Savings<<<<

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