Tax Tips

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Use These Tax Credit Tips As A Guide

So what about tax credits? A tax credit I more valuable overall than an equivalent tax deduction because of the reason that a tax credit will reduce the tax dollar for dollar. A deduction will only take out a certain percentage of tax that is owed back. A consumer may itemize certain purchases on their federal income tax form, meaning that it will lower the sum of the amount of taxes they owe to the government.

If you practice energy-saving tactics and make an effort to conserve energy, then you’ll be at an advantage. This is because fuel-efficient vehicles, along with energy-efficient appliances and products will provide many more benefits. These benefits include better gas mileage, lowering gasoline costs, leading to fewer emissions, lower energy bills, reduced pollution, and more indoor comfort.

Some of the consumers out there will be able to get utility or state rebates, on top of federal tax incentives. This is also the case for state tax incentives for those with energy-efficient homes, equipment, vehicles. Look to your state energy office web site for more information on specific state tax information.

Use the following information on tax credits to see many of the tax credits that are available to consumers. For more extensive details, check out the Energy Star page on Federal Tax Credits for Energy Efficiency.

Improve your Home Energy Efficiency for Tax Credits

For consumers out there that purchase and place specific products, like energy-efficient windows, doors, insulation, roofs, on top of heating and cooling equipment in existing homes, they can receive a tax credit of 30% of that cost. This could be about $1,500 for improvements that are “placed in service” starting on the first of January. If you would like more information on this, feel free to visit the Energy Star website ( for more complete look of energy efficient tax credits that are available to you.

Tax Credits for Residential Renewable Energy

For those consumers out there that install solar energy systems, which include solar water heating and solar electric systems, small wind systems, residential fuel cell, micro turbine systems, and geothermal heat pumps, you can receive 30% tax credits. This is possible if you placed the systems before December 31, 2016, as the previous tax credit cap is no longer applicable.

Tax Credits for Automobiles

This is specifically for hybrid gas-electric and alternative fuel vehicles. For individuals and businesses that buy or even lease a new hybrid gas-electric car or truck are able to get an income tax credit for vehicles “placed in service” starting back in January 1, 2006 and purchased on or before the end of December 2010. The amount of tax credit that you will receive will depend on the fuel economy, how much the vehicle weighs, and whether the tax credit has been phased out or not. Hybrid vehicles out there that use less gas than the average vehicle with a similar weight that meets an emissions standard will qualify for the tax credit.

This particular tax credit will be phased out for each of the manufacturers once that particular company has sold 60,000 eligible vehicles. At that particular point, the tax credit for each company’s vehicles will be slowly reduced over the course of fifteen months. You are able to see the IRS’s Summary of the Credit Qualified for Hybrid Vehicles for more detailed information on the status of particular vehicle eligibility.

For Those That Don’t Meet the Minimum Amount…

For many people out there, filing a tax return by mid-April is a normal task; however, for those people who don’t reach the minimum amount of income, tax season could be fairly easy. This does not mean that you should avoid filing a tax return. Even if you don’t have to pay any taxes based on the small amount of income that you have earned, there are still good reasons out there to file a tax return because you’ll still get a tax refund.

Furthermore, there are also reasons why you might be required to file a tax return even if you did not meet the minimum requirement to file a tax return. The following are a few credits that may result in you getting a refund check, even if you do not owe any taxes at all this year. There are also some alternative reasons as to why you might have to file a tax return regardless of the amount of money that you’ve made.

Having Tax That Was Withheld

If you happen to be married and are under the age of 65, you do not have to file a tax return if your household income is below the minimum requirement of $19,000. Although, that does not mean that your employers did not withhold taxes. If you’re filing a tax return, then you will produce a refund off of those withholdings if you have no other taxes that are due. This is as easy as completing a 1040EZ form in most scenarios. Companies such as Turbo Tax will allow you to complete the form by using their online software for free.

Income Tax Credit You’ve Earned

There is Earned Income Tax Credit that was set up by Congress, allowing low wage earners out there the ability to hold on to more of their paycheck. If you have a tax obligation that is less than the amount of the credit, you might be eligible for a refund of that remaining tax credit.

Tax Credit for Children

The IRS will provide a tax credit for each dependent child for lower income earners. If you have a tax burden that is lower than the maximum credit, you might be able to get a refund. In order for you to qualify, you have to meet some particular requirements. Go to the IRS website to learn more about these specific requirements.

The American Opportunity Tax Credit

The American Opportunity Tax Credit will reimburse a specific amount each year for qualified education expenses for individuals that qualify for it. This tax credit was expanded to allow individuals who don’t owe any taxes to qualify or a refund even if you wouldn’t normally file a tax return. If you happened to have paid college tuition or other qualified expenses, but aren’t required to file a tax return, this particular tax credit could provide a quite hefty refund check. Check out the IRS website to see if you qualify.

Reasons Why You Still Might Have to File

Even if you didn’t meet the minimum amount of income by the IRS, there may be other reasons to file a tax return. If you were self-employed and have earned more than $400, sold your home, have received distributions from a retirement account, owe Medicare or social security taxes on tips that you did not report, or if you’re required to an alternative minimum tax, you might have to file a return. Make absolutely sure that you do not have to file a tax return or there may be IRS penalties if you find out you have to file later down the road.

Never assume that just because you didn’t make enough money to file a tax return that you shouldn’t file one. There are many tax credits that are available to you even if you have a tax bill of zero this year. Take the time to read about the credits, as some are more than $1,000. Take the time to read about the credits that are available to you.


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