Recent Trends In Tax Credits: The Working Tax Credit & Investment Tax Credit
Various tax return credits exist for individuals or businesses to possibly be qualified for when it comes time to do their tax returns. Two of these that are fairly new and are given to those who are making contributions towards society and who pay into the federal government throughout the year through their paychecks or business practices. 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. 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. If someone makes low to moderate income through working, there is a good chance that they will be eligible for the $400 credit. 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.