Get ready for the 2017 tax season by knowing what home improvements you can make to qualify for energy tax credits. Home improvements are more affordable and beneficial for you if you go with ones that fall under the Non-business energy property credit and the residential energy efficient property credit. So, let’s jump in and get started.
Non-Business Energy Property Credit
With this credit, homeowners are able to claim 10% of the price of the eligible home improvements (excludes labor/installation fees).
Qualified energy efficiency improvements – Insulation, exterior windows, storm windows/doors, metal and certain asphalt roofs
Residential energy property expenditures – electric heat pumps, central air conditioning, natural gas/propane/hot water boilers, natural gas/propane/oil furnaces, advanced main air circulating fan used in natural gas/propane/oil furnaces, and biomass fuel stoves.
The nonbusiness energy property credit has a lifetime limit of $500 after 2005 and is broken down below.
$200 on windows
$50 on advanced main air circulating fan
$150 on qualified natural gas, propane, or hot water boiler
$300 on energy efficient building property
Residential Energy Efficient Property Credit
Homeowners are able to claim 30% of the cost of alternative energy equipment installed in or on their homes for the following things:
Solar electric property
Solar water heating property
Fuel cell property
Small wind energy property
Geothermal heat property
This credit has no dollar limit for many property types. If the credit exceeds the amount that you owe in taxes, you can claim the unused portion the following year during tax season. However, this excludes the fuel cell property, which has a $500 cap for each one-half kilowatt of capacity of the property.
As a homeowner you might be asking yourself if there are any tax breaks for all the money you spent improving your home. The answer could be yes or no. Either way, you will need to track your expenses for any home improvement.
Once you make a home improvement, like putting in central air conditioning, installing a sun-room or upgrading the roof, you are not able to deduct the expense during the year you spent the funds. You should maintain a record of those costs; they might help you to lower your taxes when you sell your home.
Improvements Vs Repairs
Funds you might spend on your house fall into 2 groups, tax wise: the expense of improvements versus the expense of repairs.
You include the expense of capital improvements to your tax basis of the property. Your tax basis is the sum of money you will subtract from the sales price to establish your profit. A capital improvement is anything that increases worth to your property, prolongs its lifespan or configures it to different uses.
While there is no specific list of what qualifies, you can be sure to add the costs of improvements to the house like a new roof, a swimming pool or a new central air-conditioning system. The improvements don’t have to be high priced items, adding things like storm windows, extra water heater, security system and intercom also count. (There are some energy-saving improvements that you can claim when you make them).
However, the expense of repairs cannot be included in your basis. Replacing a window, painting a room or fixing a gutter is considered repairs not improvements.
Keeping Track Less Crucial than Before
Previously, it had been essential for property owners to hold on to invoices for everything that might be eligible as an improvement. Every single cent included was a cent less that the IRS could potentially tax once the house was sold.
But these days the home-sale profits are tax-free for the majority of homeowners, there’s no certainty that diligently keeping track of your basis is going to pay off.
Save Once You Sell
Under existing regulations, the initial $250,000 of profit on the selling price of your principal dwelling is tax-free ($500,000 for married couples who submit joint tax returns) once you have owned and resided in your house for a minimum of 2 of the 5 years leading up to the sale.
After this regulation was made law, many experts assumed it meant property owners did not have to keep track of their basis. All things considered, what are the chances that anyone would record a quarter of a million dollar profit (or a very nice half a million) on their house?
But that big of an exemption is probably not sufficient to protect the gain in a property that you’ve actually owned a long period of time. Therefore maintaining meticulous records is still a good habit.
To figure out the amount of profit once you sell, you take into account whatever you paid for the residence, the initial purchase price, charges etc., and add to this the expense of any improvements you made over time to arrive at an overall sum, that is called the “adjusted basis.”
(If you sold a property before August 5, 1997 and benefited from the old law that allow the property seller delay the tax on their profit by “rolling” the gain over into a new house, your adjusted basis is decreased by the sum of any rolled-over cash gain.)
Look at the adjusted basis with the final sales price you receive for the property. If you’ve produced a profit, that increase could be taxable (usually only when the profit exceeds $250,000 for an individual or $500,000 for a husband and wife submitting together). On the other hand, deficits on sales of private dwellings are not tax deductible.
It becomes clear it would be wise to maintain a record of everything you invest to update, improve or maintain your property, in order to reduce or avoid income taxes once you sell.
Prepare a unique file to keep all invoices and details for all upgrades that you make to your property.
If you’ve resided in your home for several years, and neighborhood property values have been steadily increasing over those years, a part of your profit when you sell might be taxable. In that case, it is possible to decrease the taxable gain by adding the upgrades in the cost basis of the property.
In the event you operate an enterprise at home or lease part of your house to someone else, you might be qualified to discount a part of your home’s adjusted basis via depreciation. In the event you so, whenever you sell the property you can’t leave out the sum of depreciation you took under the $250,000/$500,000 profit exclusion break. Additionally, the price of repairs to that area of your house could be currently tax deductible.
Remember, when you file your taxes with TurboTax, you don’t need to know which schedules to fill out. We’ll ask you simple questions about your life and put your answers on all the appropriate forms.
The child tax credit for 2017 is worth up to $1,000 per child that is under 17. To be eligible to claim this credit your child or dependent must first pass all of the following tests:
Must be 16 or younger on the last day of the year
Must be a US citizen, US national, or a resident alien
Must be claimed by you as a dependent
Must be related to you by blood, or step relationship, or legally adopted child/foster child
Must have resided with you for more than half of the year (special rules apply for special circumstances such as divorce)
You must have provided them with more than half of their support
Your 2017 Child Tax Credit Amount
The credit is worth a maximum amount of $1,000 per child.
The Child Tax Credit is partially refundable if your earned income was more than $3,000.
The Child Tax Credit decreases if you have an AGI of $75,000 ($110,000 for married filers and $55,000 for separate filers).
You must include foreign income exclusions when calculating your income for this specific credit.
Claiming the Child Tax Credit
Any parent or legal guardian with a child age 17 or younger at the end of a tax year can claim said child for the child tax credit. The child must reside with the claiming parent for more than 50-percent of the year. The child also cannot financially support themselves with at least half of their own expenses.
When you prepare your taxes with TurboTax you automatically are asked the right questions to determine if you qualify and how much do you get back in taxes for a child.
TurboTax Child Tax Credit Video
The Additional Child Tax Credit
The Additional Child Tax Credit (ACTC) is a refundable credit that taxpayers who receive a larger child tax credit than their income owned receive if their earned income is greater than $3,000.
Form 1040 (Schedule 8812) helps determine if you qualify and the amount of the credit that you will receive. If you e-file your return the software will do all of the math for you. Worksheets for eligibility can be printed from the IRS.gov website anytime of the year.
Dependents on Multiple Returns
Only one taxpayer or couple can claim the child for the Child Tax Credit and ACTC. If more than one person tries to claim the child, the IRS will determine who gets to claim the child using the tiebreaker rules.
Other Child Related Tax Savings
Most parents and legal guardians are aware of the earned income credit (EIC) and child tax credits that they can qualify for to reduce their tax liabilities.
Some do not know that adoption credits can be taken as well as paying out-of-pocket (OOP) for child/dependent care. These deductions can help reduce your tax liability, and in some cases, result in a refund.
Earned Income Credit (EIC) – In order to qualify for the EIC, you must meet income limitations and have the required number of qualifying children for your income level. The income thresholds can change. An example is the recent 2015 earnings year. Families with a single child filing jointly cannot have an adjusted gross income (AGI) more than $44,651. For single/head of household and surviving spouses, the income limit for a single child is $39,131
Child and Dependent Care Credit – You could deduct up to $3,000 for one dependent, or up to $6,000 for more than one with this credit. The percentage of child and dependent care costs that you can claim, as an allowable expense is 20 to 35-percent based upon your AGI. If you have a single qualifying child, the maximum credit amount is $3,000. For two or more children, the maximum credit is $6,000.
Adoption Tax Credit – If you have already adopted or are in the process, you may qualify for this credit. The process of adopting a child is costly. Some employers assist employees with adoption expenses. This “income” can be deducted and claimed as employer-provided adoption assistance. You can also claim any monies paid to an adoption agency for the adoption of a child that qualifies for the credit.
You cannot receive any excess funds. The maximum credit can change, view the yearly guidelines set by the IRS. Leftover monies are rolled forward as credits on upcoming tax returns.
Student Loan Interest – Student loan interest can be deducted up to the amount of $2,500 per school/tax year. The modified adjusted gross income constraints to claim this credit require that those filing single do not have more than $80,000 income. For those that are married, the income threshold is $160,000 if you file jointly
Filing Status – If you are unwed and your child resided with you for more than half of the year, you could qualify for a higher standard deduction and lower tax rates with the Head of Household filing status.
Exemptions – Receive the standard exemption for each child that qualifies.
How TurboTax Can Help
You don’t need to worry about figuring all this out. TurboTax makes it easy. After asking you a few simple questions about your family, TurboTax will determine for you who qualifies as a dependent on your tax return. That way, you’ll get the biggest tax refund possible with the least amount of hassle.
When you’re doing your income taxes, you will require a number of forms and probably the most significant one is the W2 form.
Every business that you were employed at in the course of the previous year is liable for supplying you with a W-2, which must be sent by January 31 of the current year. You may be able to get yours sooner online.
How to Get Your W2 Form Online
Many Employers are making their W-2 forms accessible on the internet since it makes submitting income taxes less complicated.
Once you get your W2 you have the option to begin filing online or download and print out your W-2 so it can be included with your tax return.
TurboTax Online will find and access your W2, which allows you to file your taxes as soon as you are ready. This year you can get your W2 easier than ever before! Just follow the TurboTax screens as it guides you to finding your W2 online.
Millions of employers and financial institutions participate so the odds are good your W2 will be available to download. You save time by doing so and it ensures that your information is delivered accurately.
H&R Block Online will also find and access your W2. When using an online based company like H&R Block, you will have the capability to get your W2 data online. You won’t have to wait for your forms to come in the mail.
The TurboTax and H&R Block search page has the capability to find and import your W2 data into your tax return for free, so you can get your refund as soon as possible!
What is a W-2 Tax Form
A W2 is a tax form that documents money paid to you, and money withheld from your paycheck. It includes your commissions, tips, wages, and the taxes that were withheld from your income for federal, state, and social security purposes.
This document has all of the information that you will need to fill out the financial information for your personal taxes. If you have worked, the IRS requires that you use your W-2 to file, and then they determine the amount of taxes that you should pay the federal and state governments.
When Do W2s Come Out?
In order to file your income taxes and get your tax refund, you have to have your W2. This form contains all of the important information that you need for your annual income tax filing.
The IRS mandates that employers have to send out or make W2’s available to their employees by January 31. Even if you switched jobs, they still have this deadline in place yet sometimes you can expect to receive it earlier. Your former employer will also include your accumulated vacation, severance, and outstanding bonuses on your W-2 form.
If you do not have your W-2 form by the end of January, confirm that your employer has your correct mailing address. If you don’t receive the W-2 from your employer by Valentine’s Day, contact the IRS at 800-829-1040 and provide them with your details so they can find your information.
Before calling them, make sure you are prepared to provide them with your name, mailing address, phone number, social security number, employers name and address, and the dates that you were employed
The IRS will accept returns without W2’s; however, this could delay your refund. The IRS has to make sure that your income is accurate and matches their records before they can issue you a tax refund.
Who Can Get Their W2 Online?
Many companies, including the military, have their employees W-2’s available online. The documents can be downloaded via a variety of outsourcing companies so the distribution process of the W-2’s are automated. Your employer should alert you as to whether or not you will be able to access your W2 online.
If they do allow you to access it online, you will get the benefit of being able to file your taxes earlier in addition to not waiting for paper copies, and eliminating the security risks that come along with having that information sitting around on paper.
How to Find Your W2 Online – Video
What to Do if You Can’t Find Your W 2 Form
The W 2 form is usually mailed to you or made accessible online by the company you work for. If the form is lost, missing or you can’t find it online, contact your employer immediately. It’s a good idea to call the IRS if you don’t receive the W2 by mid-February.
In the worst case scenario, you can fill out Form 4852 and attach it to your tax return. The substitute wage and tax statement allows you to input the same details. A tax extension is another possibility, and buys you more time.
Your best bet is to file on time. If the W 2 arrives later, and the information is different from your estimates provided, Form 1040X can be filled out to correct any discrepancies, and amend the previous year’s tax return.
Getting Multiple W-2s from the Same Employer with Different Amounts
Usually, if you have multiple W2s from the same employer, with different amounts you need to enter all of them. Turbo Tax or H&R Block can help you get all of the W-2s entered and will calculate the combined income. You may have to file multiple W-2s if any of the following situations apply to you:
You worked for a temporary agency that sent you on different jobs. This will cause you to have multiple W-2s with different amounts but the same Employer Identification Number.
Your employer changes their payroll or placement agency who is responsible for your pay
Your employer was purchased or merged with another company
Different divisions of your company paid you. In this case the Employer Identification Numbers will differ
Your employer reports additional compensation, such as reimbursement for employment business expenses
In the event that all of the Employment Identification Numbers, addresses, and names are the same you may want to contact the payroll department to see why the W-2s were issued like this. If it is a payroll error, you will have to get a correct W-2.
How to Get Prior Years W2s
If you file a prior year tax return, there may be complications such as missing W-2’s and other forms. You can still get a copy of that form. To receive a copy of a prior year W-2, there are a couple of possibilities.
Contacting the issuer is the easiest way to find that particular W2. Employer payroll departments save such important documents that contain tax information. You can simply contact them and ask for the form to be sent to your address. This is usually best way.
You can also contact the IRS directly. If you can’t get in touch with that employer, then you will need form 4506. Although it may take longer and cost you some money, this allows you to obtain the copy of that year’s W-2 rather than do nothing.
It’s important to note the IRS holds past W-2’s and other tax documents for 7-10 years. They’re filed under each taxpayer’s social security number. You can ask for a W-2, but not until a year after it was filed, and form 4506 will be required to get a copy thereafter. Also note:
The IRS charges a $57 service fee; checks are paid to “The United States Treasury”.
Check the second page of form 4506 for the address to send it to.
It takes the IRS up to two months to process the request and send the W-2.
Contacting a current or former employer is the easiest way to get a prior W-2. The IRS is the next alternative if you can’t contact the employer or you do not wish to contact them again.
Some taxpayers may experience a delay in receiving tax refunds in 2018. This is for tax returns due by April 15, 2018.
Quoted from an IRS press release, John Koskinen, IRS Commissioner said, “We don’t want people caught by surprise if they get their refund later than the normal date.”
Tax return filers claiming Additional Child Tax Credits (ACTC) and Earned Income Tax Credits (EITC) may have their refunds held up by the IRS for several weeks. The IRS tax refund schedule dates could be held up until February 15.
An additional factor coming into play is heightened identity theft awareness. Both IRS and state tax authorities are required to take extra steps to prevent fraud. The additional steps required by these entities takes effect for the 2017, 2018 income tax filing season.
To prevent a delay in receiving your tax refund when claiming either the EITC or ACTC, make changes to your income tax withholdings for the remainder of 2017. What this does is puts more money in your pocket now but reduces your refund later.
Tax Refund Dates Without a Delay
The IRS usually issues 9 out of 10 refunds within 10 days after efiling. The chart below will help you determine when you should get your refund.
However, keep in mind the IRS tax refund schedule dates are an estimation and is not set in stone. Sometimes there are delays, which may cause your refund to take longer than 10 days to reach you.
More than 80% of taxpayers get a tax refund. Last year, federal tax refunds averaged almost $3,000. That’s why we’re encouraging people to file as soon as they can. Be first in line with TurboTax Online or H&R Block Online. There is no faster way for taxpayers to speed up their tax refund dates.
Both firms will securely hold and then submit customers’ tax return to the IRS as soon as the agency begins accepting returns. Both firms will process tax returns on a first-in, first-out basis. Although the IRS does not anticipate refund schedule delays, taxpayers are encouraged to e-file and use direct deposit as the fastest way to get their refunds. As it did last year, the IRS expects to issue nine out of ten tax refunds in 21 days or less.
Calculating Your Tax Refund
H & R Block and TurboTax both have free online tax refund calculators. To use them you have to have your filing status, deductions, income, and dependent information on hand. You won’t have to enter any overly personal or identifying information, but the more information you provide, the more accurate your estimations will be.
Estimating your refund does not have to be hard, thanks to these two websites. You can plan and make sure that you spend your refund wisely when it arrives.
What to Expect When Filing Your Taxes Online
Making the decision to file online is your key to making tax season less stressful. All you have to do is answer a few questions about your tax situation, have your information put on the correct tax forms, and the online system will bring to your attention the deductions and credits that you are eligible for.
This way you can keep more of your hard earned money. They even have a free tax refund calculator so you can see how much of a tax refund you should expect.
It is recommended that you file your tax return online because it will be processed quicker and you will receive your return in the shortest time possible. If you mail in your tax return your refund date could be delayed for several weeks.
Who Can Get a Quick Tax Refund?
As long as an individual does not owe the IRS any money and has some earned income, they are eligible for a quick tax refund. All these taxpayers have to do is e-file and they should be anticipating a refund check according to the IRS tax refund schedule dates. That is what you call fast because some people wait a month before they are paid for working their daily jobs.
Just remember that in order to get a quick refund you must have all of your tax documents in order so that there are no reasons for the IRS to put a hold on your money. If the information provided to the IRS is, information that does not seem to follow through, they can also put a hold on your refund for that as well. So make sure the information provided is accurate and correct to ensure you receive a refund.
Ways to Receive Your Tax Refund
Direct Deposit – This is the quickest way and it can go to your checking or savings account, including IRAs. You can even ask for it to be deposited into your TreasuryDirect account so you can buy U.S. Treasury marketable securities and savings bonds.
By purchase of U.S. Series/Savings Bonds up to $5,000
Paper check mailed to the address you used when filing taxes
To put a stop to fraud and identity theft, the IRS limits the number of direct deposits that can go to one financial account to three. This also includes prepaid debit cards and if the limit is exceeded a notice will be mailed with a paper check.
This year you also have the option of having your refund partially or fully deposited into your myRA account. This is a new type of retirement account from the U.S. Treasury. However, in order to do this, you have to already have a myRA account before filing your return. You will also need your routing and account numbers.
Splitting Your Return
If you are opting to receive your return via direct deposit, you do have the option of splitting up your return into up to three different accounts. For example, you could put some in your checking, savings, and retirement account. In order to do this you must complete and attach Form 8888 to your federal tax return.
However, you are not able to do this if you file Form 8379. Also, keep in mind that the accounts that you are depositing your money into should be in your name, your spouse’s name, or a joint account, which includes both you and your spouse’s name. Lastly, in order to do the direct deposit option your refund amount has to be at least $1.00.
Checking Your Refund Status via the IRS
You no longer have to worry about using the IRS Refund Cycle Chart or schedule to try to find out when your refund will arrive. Instead, thanks to technology, you can use the “Where’s My Refund” tool that is located on the IRS website.
It will provide you with the status of your refund and alerts – Tax Return Received, Tax Refund Approved, and Tax Refund Sent. If you have filed a paper return, it will take up to four weeks for your Return Received alert to show. However, if you e-file the alert usually shows within 24 hours.
To use the tool you have to enter your personal information, such as your social security number, filing status, and refund amount.
Checking Your Refund Status via the Phone
If you have a smartphone, you can download the IRS2GO app and check your refund status directly from your phone. It is available for Apple and Android phones. You will still have to enter your personal information to obtain your refund status.
Alternatively, you can call the IRS Refund Hotline at 800-829-1954. You will still have to enter the same information as you would if you were to check your refund status via the internet.
Video Information About IRS Tax Refund Dates
Tax refunds for e-filed returns are usually processed within 10 days of the e-file acceptance date. Refunds from paper returns can take six to eight weeks to process from the date that the return was received. Despite nine out of ten returns going out in this period, if the return is incomplete or inaccurate, further review of the return can cause the refund schedule date to be delayed.
Now you have learned quite a few different ways for you to check refund dates and the status of your refund. All you have to do now is go with the option that works the best for you.