Two Federal Tax Credits: Investment Tax Credit & Working Tax Credit
There are several tax credits that people may be eligible for when they do their income tax return, or when a business does their taxes at the end of the year. Two of these that are fairly new and are given to those who are making contributions towards society and who pay into the federal government throughout the year through their paychecks or business practices. These are the working tax credit and the investment tax credit.
The ITC, or investment tax credit, gives an individual or business a reduction in their liability after the prior year’s investments into solar energy generation advancements. This and other renewable energy tax policies serve a purpose in making high-wage American jobs, thus bringing about economic growth and helping to protect the environment. They also benefit consumers and businesses by lowering their energy costs. The incentive to make an investment into the industry helps to ensure manufacturing and construction of solar energy products, as well as the solar industry’s growth in the United States. This tax credit is currently only in effect until December 31, 2016. Though this has only recently gained momentum, a similar incentive was put in place in 2006 through the Energy Policy Act of 2005. There is a 30% uncapped credit for both residential and commercial systems with the ITC. A 2008 act created an eight-year extension after there was an economic downturn. These credits helped with creating a large amount of growth in the U.S. solar industry from 2006 to 2007.
The Making Work Pay credit, or working tax credit, is for people who have an income under a certain amount defined by the guidelines. If someone makes low to moderate income through working, there is a good chance that they will be eligible for the $400 credit. Someone will receive this even if they are not getting a refund check back, as it will go towards paying off part of what they will have to pay in back taxes to the government. If you feel confident enough, you can use a tax program to do your own taxes, or you can visit a tax attorney or preparer so you can learn about the deductions and credits that you may be eligible for. The government has implemented the Making Work Pay, Earned Income, and child care credits to help hard working people keep more of their money or receive a greater refund.
With the invention of the working tax credit and the investment tax credit, businesses and citizens alike have profited from the steps that they took in the last year. Every little bit counts in the struggling economy, so you should do your research either online, on a tax preparation program, or by speaking to a professional. Doing your tax return does not have to be a stressful experience, even though most people dread this time of year as they expect to get charged by the IRS or not get much of the taxes back that they put in.
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