Tax Credit

[bloodhunter]

Was not sure whether to post this here or on Dollars & Cents but our accountant tells us that we can get a tax credit for the wind generator and solar panel we're installing on Enchantress. Seems that as long as the boat qualifies as a primary residence or summer home you can get the credit. Nice to get a break for a change

[imagine2frolic]

Listening to the news several weeks ago. I was thinking the same thing? I am sure if it works they will make changes in the coming years!..........i2f

[seandepagnier]

I have installed a wind generator and solar panels, but I guess they don't give tax credits if you don't pay taxes?

[S/V Illusion]

Originally Posted by geckosenator

I have installed a wind generator and solar panels, but I guess they don't give tax credits if you don't pay taxes?

Sure you can. Just think of it another way - you can get a 10% credit back on the total amount of tax you paid --
10% of 0 = 0

I think someone may be confusing a tax credit incentive program for replacing energy inefficient appliances with energy star-rated appliances

[FSMike]

Nope - The solar panel/wind generator tax program does exist. Too late for those of us who already had them. Darn.

[Captain Bill]

Originally Posted by S/V Illusion

Sure you can. Just think of it another way - you can get a 10% credit back on the total amount of tax you paid --
10% of 0 = 0

I think someone may be confusing a tax credit incentive program for replacing energy inefficient appliances with energy star-rated appliances

Clearly you don't understand the concept of a Tax credit. If you pay zero taxes, the government will give you the value of the tax credit in the form of a refund. So if you got a $1000 tax credit and you owed zero taxes, the goverment would send you a check for $1000.

[S/V Illusion]

Bill
a "credit" is a credit. One can't get credit for doing nothing or in this case, paying nothing.

[hellosailor]

In the US, there are federal tax credits and like all [sic] federal tax matters they are determined by the IRS. The IRS defines what a residence is, and the IRS doesn't care if it has wheels or sails or wings or a basement, as long as it meets the other criteria for a residence. (Bunk, galley, head.)

Sometimes the tax man is outright reasonable!

[rebel heart]

I put my purchases on there; it's something like 30% of the total cost, up to a couple thousand. Nice of them to put a tax break in a place that helps the environment and independence.

[svHyLyte]

a "credit" is a credit. One can't get credit for doing nothing or in this case, paying nothing.

I would agree with that under normal circumstances but at the present, the current administration has designated many "tax credits" for favored programs/ groups as "refundable" meaning that, if one doesn't pay taxes, the government will borrow the money and send one a check. Just because one doesn't pay taxes, one shouldn't be deprived of the benefit of tax credits. That would only favor the wealthy.

FWIW...

[sabray]

I took the credit on my return and included the wiring panels controller and improved battery bank it's all a part of the system. Next year I think I will add 2 more panels. I did have taxes deducted last year I paid. Intersting that if you don't have income you can still get a return not sure I can believe that but it's abit off my skill level.

[RunningFish]

It used to be - not sure if it's still in place - that alternative energy purchases (like wind or solar) were tax deductible, meaning that the price paid was deducted from your taxable income before taxes owed were calculated. This is different than a "tax credit" as described above.

[Palarran]

I pretty darn sure Capt. Bill is right, a credit is a credit and the government will send you a check if you don't owe any taxes, regardless of whether you had income or not. You do of course have to file a return. And, if you file a return and show that you had no income, then claim $10,000 for installing solar and want your 30% back, be prepared for an audit.

There are two types of audits. The first is where the IRS comes in and teaches you the proper method of accounting, then hands you a bill for the privilege of the lesson. The second is where the IRS comes in and you leave in handcuffs. Tax evasion verses legal tax avoidance.

[hellosailor]

"And, if you file a return and show that you had no income, then claim $10,000 for installing solar and want your 30% back, be prepared for an audit."
That may trigger an investigation, but not necessarily a full audit. For instance, if they say "Come to our offices and bring your papers" you may be able to satisfy them by showing there was no income and the $10,000 came out of savings while you were unemployed for a year. That's all you have to do--if the 30% is a rebate and not a tax refund or credit. Tax credits can also sometime sbe carried forward, so whether this is a problem or not depends on exactly what the details are, and how they apply in a situation.
The IRS.GOV web site has great documentation on most problems, and for most of the year the IRS actually does a damn fine job answering the phone and detailed questions for taxpayers. And has offices in most "federal buildings" and county centers, etc.
Right now...they still answer the phone but I'd expect an hour's wait and some impatient staff.