Recent Trends In Tax Credits: The Working Tax Credit & Investment Tax Credit
identity theft protection No Comments »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. 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. 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. The credit is in effect until the end of 2016. Though this has only recently gained momentum, a similar incentive was put in place in 2006 through the Energy Policy Act of 2005. The investment tax credit is a 30% uncapped tax credit for commercial and residential solar systems. 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. The ITC helped to bring about significant growth between 2006 and 2007 for the solar industry in the United States.
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. 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. 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.
Through the investment tax credit and working tax credit, many people and businesses have benefited from the actions that they have taken in the previous 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. It should not be a difficult time to work on your taxes, though numerous individuals find it to be unpleasant as they are not sure if they will get a refund at all, or if they will owe during this time.