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 them were created relatively recently, and they are made available to people who contribute to the country as well as pay into the system during the year through income tax or business procedures. They are the investment tax credit and the working tax credit.
The investment tax credit (ITC) creates a reduction in an individual’s or business’ tax liability when they have made investments towards solar energy generation technology in the previous year. 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. These tax policies also lower energy bills for businesses and consumers. This incentive to invest in the solar energy industry ensures the construction of projects, manufacturing, and the ultimate growth of the solar industry throughout the United States. This tax credit is currently only in effect until December 31, 2016. Even though the ITC did not truly gain popularity until fairly recently, the Energy Policy Act of 2005 implemented another in 2006. There is a 30% uncapped credit for both residential and commercial systems with the ITC. When the economy took a dramatic downturn in 2008, the Emergency Economic Stabilization Act of 2008 provided for the commercial and residential solar ITC to be extended for eight years. 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. It is likely that people will receive the $400 credit if they have a low to moderate work income. They will get this whether or not they are even going to be receiving a refund. You can either use a tax program yourself which walks you through each step to let you know what credits and deductions you are eligible for, or you can go to a qualified tax preparer or tax attorney who will help you to receive the highest refund or owe the least possible. 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. In the current economy every little bit counts, therefore you should do an in-depth review of anything you are eligible for, whether it is on your own or by talking to a tax preparer. 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.