Tax Credit Savings
So what’s a tax credit and how does it work?
First let’s clarify that a tax credit is more powerful than a tax deduction. After you enter your information on your tax returns and take advantage of any available deductions, you get to the bottom line, whether you owe anything to the government or not. If you owe a dollar in tax, but have a tax credit worth a dollar, the tax credit erases your debt (dollar for dollar).
It’s likely that most folks will owe less in taxes than the value of the tax credits. What happens then? We’ll look at how the federal government deals with that residual amount.
The Federal 30% Tax Credit
The federal government will allow you to roll over and redeem the balance of tax credits in future years. The Federal credit is claimed on IRS form 5695, ―Residential Energy Credits.
Always remember to consult a CPA or professional tax advisor for how solar tax credits would apply to your individual financial circumstances.
Making Solar Affordable
Several easy options are available to simplify a solar purchase. These options significantly lower the upfront cost of a system and often provide a short- or long-term payoff plan for the remainder. The best option depends on your unique situation involving home equity, capital resources and credit score.
Solar Alternatives encourages owners to thoroughly investigate the options and find the most stable and trustworthy program to meet project financing needs. Your mortgage lender, government organizations, and personal credit sources are all potential financiers.