Question

solar Energy Tax Rebate

Forum|Forum|2 years ago
May 24, 2024
2 replies
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I bought all my solar hardware for my solar project in 2023 and finished my project only in January 2024 (Utility approved PTO).

I didn't claim my tax credit on my 2023 Tax Return and will be doing for 2024.

As I am going to get about $5,000 tax credit, as I also has RMD to take and trying to roll some of my IRA into my Roth.

I have to figure out how much I can safely roll from my IRA to Roth as I do not want to have my AGI exceeds the threshold that would raise my Medicare Part B premium.

It may be hard to figure out how much my 2024 AGI would be. Is it possible that I claim partial solar energy tax credit in 2024 and the remainder for 2025 to my tax advantage?

J

JotikaT2

No, the energy credits can only be taken in the year the eligible improvements were made.

However, if you do not have enough of a tax liability to use up the entire credit, it will be carried forward to next year until it is utilized. This is because the Residential Clean Energy Credit is a nonrefundable credit. It can only be used to offset the tax liability shown on your tax return.

Please see this link for more details on the potential energy credits available.

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N

NCPERSON1

the solar energy credit is not going to affect you AGI, so either I am not following your concern or you are not thinking about this correctly.

IRMAA is generally based on Line 11 of your tax return; the tax credits come into play much further down the form than that.

this is an excellent website to assess the IRMAA impact -

https://thefinancebuff.com/medicare-irmaa-income-brackets.html

S

SLYKTAXAuthor

Thanks for the explanation. I believe capital losses of $3000 is the maximum that I can claim a year to reduce my AGI and IRMAA then.

Suppose I do have capital loss carryover from prior year but I have capital gain of $3,000 for the year, that would even out with $3,000 from carryover losses . Don't you think it is better in this case, to do tax harvesting by selling one that has a loss say, $3,000 or so too? That way I can use capital carryover loss of $3000 to bring my AGI down by $3,000? Am I right?

S

SLYKTAXAuthor

Also, be sure any bond investments are primarily in your 401k / trad IRA while any equity investments are primarily in the Roth and after tax portfolio. that will slow down the growth of the 401k/ trad IRA without changing the returns on your overall portfolio.

Thanks