by Blair Butters | Mar 7, 2023 | Tax Credits
On August 16, 2022, President Biden signed into law the Inflation Reduction Act (IRA), which expanded and extended two nonrefundable tax credits meant to encourage individuals to invest in energy efficiency improvements or clean energy in their homes. The IRA also proposes to lower energy costs, increase cleaner production, and reduce carbon emissions by approximately 40% by 2030. Today, we’re breaking down these two tax credits, how they are changing, and how they will affect you as a homeowner in 2023 and beyond. Energy Efficient Home Improvement Credit Homeowners may be familiar with this first credit, the Nonbusiness Energy Property Credit, which expired at the end of 2021. The credit was extended for tax year 2022, using 2021 parameters, however, the IRA extended and significantly improved the credit for 2023 through 2032 and has given the credit a new name – the Energy Efficient Home Improvement Credit. The old credit, applicable prior to tax year 2023, was worth 10% of the costs of installing certain energy-saving improvements in your home, such as windows, doors, roofing, and insulation. The credit had lifetime limits on the amount of credit taken, such as an overall $500 lifetime limit and a $200 lifetime limit for new windows. This meant credits taken in previous years counted toward the limit. There were also some individual credit limits for any advanced air circulating fans ($50), any qualified natural gas, propane, or oil furnaces and hot water boilers ($150), and any single energy property item ($300), such as certain water heaters and heat pumps. In 2023, the credit is now equal to 30% of the costs...
by Blair Butters | Feb 24, 2021 | General Tax and Accounting Information, Tax Planning
A report by Gallup indicates that the number of people working from home has jumped from 28% in April 2020 to almost 46% in September 2020, showing a rising trend. So how does this affect your taxes? If you’re working from home as a W2 employee, unfortunately, you can’t take any deductions. However, for those reporting their business on Schedule C of their personal income tax return, usually sole proprietors or Single-Member LLCs, or gig economy workers – AKA someone who works on short-term contracts or freelance work as opposed to a permanent job – then there are a number of deductions you can claim. In this month’s blog, we walk you through some of the most common ones and how to calculate them. Your Home Office One of the first things you may be able to deduct is expenses related to your home office. A home office is a space in your house used regularly and exclusively for business purposes. So, for example, if your office is in a second bedroom which is regularly and exclusively used for business, then the room qualifies as a home office. If the room is also used as a spare bedroom when guests are visiting, or as a playroom for the kids, the room does not qualify as it fails to be exclusively used for business. You will need to know the square footage of your home office space and the square footage of your home. This ratio will determine the percentage of various home expenses that can be claimed as a home office deduction. Once you have this information, there are...
by Blair Butters | May 4, 2017 | Uncategorized
Do you struggle to try and save money? If you are a business owner, pursuing financial goals should be a priority, but it can be difficult to stay on track. The good news? You don’t need to have a substantial income to get your savings underway. Here are 5 simple tips to support your journey as you work to grow your savings, and boost your dreams Determine your goals: Goal setting is an essential habit if you want to win in the saving money game. Writing down your financial goals and keeping the list somewhere you can see it, such as on your refrigerator, will get you to stick with it, versus not having any goals at all. Make sure your goals are S.M.A.R.T.: specific, measurable, attainable, realistic, and time oriented. Figure out how long it might take you to save for each goal with a tool like Bank of America’s savings goal calculator. Create small steps for each goal to make achieving it less scary and more manageable. And celebrate when you reach each milestone…you deserve it! Make a budget …And stick to it! You need to establish where you are — before you determine where you are headed. It’s not as scary or difficult as it may seem. And when you get control over what you are spending vs. saving, it will add freedom to your life and help you make the best choices to benefit your long-term goals. Saving money is not about depriving yourself, but rather empowering your efforts. Cut excess spending Do you carefully track your expenses? Each and every one, from your daily...
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