Sometimes making the decision to go green can be tough. There are many programs provided by your local and federal government that individuals and businesses can take advantage of!
DSIRE is a comprehensive source of information on state, local, utility and federal incentives and policies that promote renewable energy and energy efficiency. Established in 1995 and funded by the U.S. Department of Energy, DSIRE is an ongoing project of the N.C. Solar Center and the Interstate Renewable Energy Council
It’s a good thing most of us only have to file taxes once a year. With all of the confusing terms, complex language, and mind-numbing math, it’s as if the people who write the tax code just wanted to bore us and trick us into a mistake or two.
Even the helpful parts – like when you’d get money back – are tough to deal with. You can easily mix up two key terms: tax deductions and tax credits. Both serve the same purpose, which is to reduce your tax burden based on certain categories of income or expenses, but they work in different ways.
Below is a description of each, and an outline of how deductions and credits are different.
In its simplest form, an income tax deduction is a reduction in taxable income. Tax deductions are probably familiar to you because they cut your taxes in broad categories like:
State and local income taxes
Most people love tax deductions because they usually involve expenses you have to take on anyway, like your mortgage and property taxes. The tax benefit seems like a great way to recover money you had to spend, but in the end, not everyone gets to take advantage of these deductions. You have to itemize your return – and not everyone can do that.
The standard tax deduction – what the IRS gives you even if you don’t itemize – is $5,700 if you’re filing as single and $11,400 for a married couple filing jointly. Unless your deductions exceed that amount, you won’t be able to itemize. Usually, people who don’t have a mortgage can’t itemize, and thus can’t take advantage of all of the available deductions. That’s where tax credits come in.
While tax deductions work by lowering taxable income, tax credits are a direct reduction of the tax due. After you figure out your taxable income and subtract your deductions, you calculate your tax due. You still have a chance to reduce that amount, often significantly, by taking advantage of any allowable tax credits