MARIELA RUIZ, CPA, PLLC

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Tag: tax services

What is Solar Power Tax Credit?

Green energy sources have many benefits to you and the world, including a federal tax credit or home and business owners who have had solar power panels installed before December 31. The federal solar tax credit, known as the investment tax credit (ITC), is much more profitable than a deduction. However, for taxpayers to get the full benefit, the world needs a sufficient income. Here are what tax professionals should know about ITC.

Introduction

When the government provides a tax incentive, it is happy about it, especially when local and state enticements convoy it. According to the Environmental Protection Agency, the government passed the ITC as part of the Energy Policy Act, which has been extended four times since its initial passage. The credit is now at 26 percent for the next two years so that eligible taxpayers can have a dollar-for-dollar decrease in the amount of income tax they owe. Taxpayers are looking forward to 2023 because the tax credit will drop to 22 percent. Renewable portfolio standards are in some states where utility companies give clients a specified minimum amount of electricity from solar. Utility companies buy energy made by a solar customer’s house. The value of solar renewable energy certificates will vary by state, but this is an example of taxpayer liberation.

How Does It Work?

            Solar power panels remain to provide people with prospective savings after filing their taxes. Solar energy creates opportunities to resell excess energy, evade power outages when harmonizing with a battery, and charge electric cars. The sun’s rays shine on the solar panels resulting in generating electricity that gives homeowners lower electric bills. The energy is completely free to the owner once the payment to the solar company ends. Also, solar power works all day, even when it is raining or dark overcast. Utility companies can offer the ability to sell back electricity to the grid for a credit on a homeowner’s electric bill. The utility companies can credit a home’s electric account.

The government is devoted to solar power that many states and cities have recognized property tax exemptions on solar. The solar panel installation calculates property tax fees giving homeowners and companies more money.

Conclusion

Solar energy panels have many benefits for businesses and homeowners. However, it could be challenging to understand everything about the tax deduction that comes with installation. You can count on Mariela Ruiz, CPA, PLLC, to help you with your taxes. We can give you tax advice for any situation you are in and find a financial solution that benefits you. We want to save you money by providing attentive and well-strategized plans, so call us at (956) 997-0067 today!

Common Itemized Deductions

When you are preparing to file your taxes, don’t forget about itemized deductions. These are individual tax deductions you can take in lieu of the standard deduction. Making the decision to itemize could potentially save you more money on taxes. To learn more about the types of deductions you can itemize, continue reading our blog.

Charitable Deductions

Did you contribute to a charity in the past year? If you made donations to a qualifying organization, you can itemize and therefore, lower your tax bill. It’s important to keep a record of donations, which can include everything from bank records to receipts. Make sure that you have the name of the organization, the amount donated, and the date. The more information you have, the more accurate your tax form will be.

Medical and Dental Expenses

Medical expenses are deductible as itemized deductions, but in a very limited way. You can only deduct the amount of medical expenses that exceed 10% of your AGI or 7.5% if you’re over 65. You and your family members that have qualifying medical expenses can take advantage of these deductions. Examples include: doctor’s fees, co-pays, prescriptions, transportation to a medical facility, and more.

Work-Related Education Expenses

If you choose to itemize work-related education expenses, you may be able to deduct these expenses from your taxes. To claim this deduction, costs must be related to maintaining or improving job skills and required by your employer. These costs include tuition, books, lab fees, travel, etc. It’s also important to note that you can only deduct these expenses if they exceed 2% of your adjusted gross income.

Conclusion

If you have questions about itemized deductions for your 2020 taxes, then call MARIELA RUIZ, CPA, PLLC. We have the tax solutions you need to get more out of your tax return. From income tax preparation to strategic tax planning, contact our advisors for more details on how you can save money!

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What You Need to Know for the 2021 Tax Season

Many will agree that 2020 has been a year of unique challenges but 2021 is just right around the corner! With that being said, below we discuss some things to keep in mind as we approach 2021 and the upcoming tax season.

Tax Day is Thursday April 15th, 2021

This is the date you must file you taxes before! Most can take the standard deduction which has increased from this year to $12,400 for single filers and $24,800 for married couples filing jointly. You may also itemize your deductions which is a little bit more painstaking, however is worth it if your itemized deductions exceed your standard deduction.

Stimulus Checks Aren’t Taxable

The CARES Act was instituted near the beginning of the COVID-19 pandemic and gave many citizens a onetime payment of $1200. These payments will not count as taxable income in the upcoming year which is great news for most tax payers! You can think of it as a kind of advanced refund you would have received as part of your 2021 tax refund.

Unemployment Income is Taxable

The pandemic has caused much of the country to shut down for extended periods of time, leaving many Americans jobless through no fault of their own. If you were one of the millions of Americans who received unemployment benefits in 2020, you have to pay taxes on that income. If you opted to defer taxes on your unemployment payments before you received them then you will need to save for the taxes that will be due when you file, or pay estimated quarterly taxes to stay ahead.

Final Thoughts

As always, consult your tax professional to get the most out of your taxes in 2021 and speak with someone who can help you in your specific financial situation. Mariela Ruiz, CPA, PLLC is here to help individuals and business owners in the Mission, TX community with their taxes and wishes you all a prosperous 2021!

Should You File Your Taxes Jointly or Separately?

For married couples who live together and share finances, tax season can bring with it a lot of questions about how you should file and why. In this month’s blog post we briefly dive into what couples need to know before filing their taxes and how they can determine if they should file jointly or separately.

Married Filing Jointly

Your filing status determines your tax rate and the amount of deductions you can qualify for. For most couples filing jointly is the best option for several reasons. Basically, married couples can continue to qualify for a lower tax rate despite having a higher taxable combined income. This tax break in addition to one of the largest standard deductions offered by the IRS makes filing jointly the best option for the vast majority of married couples.

Married Filing Separately

The circumstances in which a married couple would benefit more from filing separately are far and few between. They mostly include situations where one spouse has outstanding deferred debt that needs to be collected promptly. Examples can include having large amounts of student debt or costly outstanding medical bills. Filing separately is also the best option for couples who are expecting to get divorced within the year.

Final Thoughts

If you’re still unsure of which status makes the most sense for you, call on a highly qualified and experienced CPA. One tax service does not fit all so it’s important to turn to a professional who is committed to finding the absolute best option for you and your family. Contact the experts here for a variety of services including forensic accounting, tax services, financial consulting, bookkeeping, and much more.

Steps to Take Before Filing Your Taxes

Before you contact your tax preparer, ensure you have the necessary documents to hand over. It’s important to have previous year’s tax information, as well as current receipts and documents. Getting an early start on gathering these items will not only speed up the process, but give your tax preparer more time to double check all of your information. Learn more about which forms you will need to file a complete tax return.

The Essentials

Forms from employers, banks, and other businesses need to be filed your tax return, so have these documents ready to go. Some of the most common forms include Form W-2, Form 1099, and Form 1098. These documents indicate the income you’ve received from the previous year. If you are unsure about which documents need to be filed, get in contact with your tax preparer for confirmation.

The Receipts

Receipts act as a form of proof to show so you can properly itemize your deductions. Whether you choose itemize or claim the standard deduction, it’s a good idea to compare your findings and see which one has the greater write-off. Your list of expenses may include anything from medical costs and mortgage interest to charitable contributions. Consult with your tax preparer if itemizing is worth it.

The Tax Return from Last Year

Grab your tax return from last year, even if you are using the same tax preparer. You can look over it for any inconsistences and ensure your current tax return is up to date. It can also provide details about forms you received from last year, and that you have these forms from this year too. Investopedia also comments, “If you made small gifts, you may not have received any acknowledgment from the organization, but you can still deduct these contributions as long as you have a canceled check or other proof.”

Conclusion

The process of filing taxes can be confusing, so let our certified public accountants do the work for you. We are here to prep your tax documents and handle all forms with the utmost professionalism. Refer to MARIELA RUIZ, CPA, PLLC for tax preparation services today.