Summer has arrived and so has the unbearable heat! Typically, east coast residents (like us) experience 80-degree weather in this time of year, however this past week temperatures peaked at 101 degrees in Bethesda, MD. So while you may be reluctant to go outside, there are some interesting ways to save money inside.
Last year, the IRS allowed a “Residential Energy Efficient Property” credit which benefitted many taxpayers. Although, the IRS just eliminated this credit for 2012. However, you can still get tax credits for solar, geothermal, wind, and fuel cell systems with no limit on the amount you claim. By filing Form 5695, you can write off all the expenses for these systems and receive a credit of up to 30% of the costs. Despite how much these systems cost, remember the IRS gives you a credit that counts dollar-for-dollar against any tax you owe, which could effectively eliminate your tax liability.
There are some cooling costs that could be considered deductible medical expenses. For example, if your doctor recommends a portable or permanent air conditioning unit to relieve a medical condition, you can write that off as a medical expense. However, this is not a normal medical deduction, so make sure you have proper documentation to support your claim. Also, medical expenses must be itemized and exceed 7.5% of your adjusted gross income before you can deduct it on Schedule A.
JDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.