Tax season is here, and you probably have more questions than answers as it starts ramping up. Filing for taxes can be confusing, even for experienced folks. There is lots of paperwork to go through, so look at the quick guide to filing for the solar federal tax credit before starting your taxes.
Check That You Are Eligible
The first step in filing for this credit is to check your eligibility. You go through a similar eligibility process with a tax filer or on a website, so you can easily find out there before filing. The eligibility verification doesn’t take too long—the first step is to note if you are the owner of a solar power system and if no one has claimed the credit. After someone claims it, you become ineligible.
Filing for the Solar Tax Credit
You need to get File 5695 from the IRS website in order to start filing. From there, fill out the form following these steps.
Before filling out line one, subtract the gross amount of money spent on the solar company from any received cash rebates, state credits, incentives, and other state rebates. Lines two through four require additional energy improvements made to your home. It can be water heaters, solar pergolas, or even a solar-powered roof. Total everything and record the amount on line five.
From line five, multiply the value by 30 percent, and enter it on line six. If you don’t claim fuel cells or have previously filed for the solar tax credit, rewrite line six’s amount on line 13. Line six tells you the credit limit; write that number on line 14. Then, compare 13 and 14, and write down the smallest number on line 15.
You can calculate carry-over amounts by comparing tax liability with tax credits. Calculate the carry-over rate by subtracting line 15 from line 13 and writing the difference on line 16. The number to use for the IRS is on line 15. When you receive Form 1040, write down line 15 for File 5695 onto line five of schedule three.
Finish Filing for the Solar Tax Credit
After finishing the forms, review everything and let your tax prepper evaluate for errors. Now, you wait to receive your tax return. There are no additional steps; the IRS sends a verification letter if they receive an error.
Filing for the solar tax credit can be confusing, but we want to make it simple before filing. If you or your family is interested in filing next year, then get a solar power system for your home
from Go Solar Power. We’re a leading solar power company looking to improve the environment and help homeowners profit from solar power.