Latest news with #ResidentialCleanEnergyCredit
Miami Herald
11-07-2025
- Business
- Miami Herald
4 expiring tax breaks for homeowners in 2025
Several significant tax benefits that homeowners have relied on for years will disappear on December 31, 2025, reports NewHomeSource. Why it matters : These expiring tax breaks could mean thousands of dollars in additional taxes for homeowners across the country. The Tax Cuts and Jobs Act (TCJA), passed in 2017, was designed to reduce taxes for most Americans by simplifying the tax code and lowering rates. Many of its key provisions were designed to be temporary, with an expiration date of December 31, 2025. See More: 7 hidden costs of home ownership you need to know before buying While Congress passed the "One Big Beautiful Bill" on July 3, 2025, the legislation confirmed that several key homeowner tax benefits will still expire at year-end, despite extending others. 1. Energy Tax Credits Termination Under today's political climate, provisions like clean energy incentives were vulnerable to cuts, and now both the Residential Clean Energy Credit and the Energy Efficient Home Improvement Credit have been repealed for systems placed in service after December 31, 2025. The current tax law provides incentives for home energy improvements, including exterior doors, windows, and insulation materials. The credit covers 30% of costs with a maximum of $1,200. Heat pumps, biomass stoves, and boilers have a separate $2,000 annual limit. "I have encouraged clients this year to consider certain energy improvements earlier over waiting. Higher value improvements, such as geothermal heat pumps, should be prioritized," said Keith Schroeder, a Wisconsin-based tax expert who runs the hugely popular The Wealthy Accountant blog. Also eliminated is the current tax incentive for homes and businesses to install EV charging stations. 2. Mortgage Interest Deduction Remains Restricted The mortgage interest landscape won't improve for homeowners with larger mortgages. Currently, homeowners can deduct mortgage interest on up to $750,000 of mortgage debt. Before the TCJA, this limit was $1 million. The current restriction applies to mortgages taken after December 15, 2017. The reality : The new legislation makes this $750,000 limit permanent, confirming there's no indication this limit will ever return to the previous $1 million threshold. "Taxpayers have lived with this restriction since 2018, so it is business as usual," Schroeder said. "Income property owners may wish to shift mortgage debt from their primary residence and second home to the income property." See More: 7 biggest Tax Day tips for new homeowners 3. Mortgage Forgiveness Tax Break Expires Debt forgiveness becomes taxable again starting in 2026. The Mortgage Forgiveness Debt Relief Act, which has been extended multiple times, is set to expire at the end of 2025. This provision allows homeowners to exclude forgiven mortgage debt from their taxable income in cases of foreclosure, short sales, or loan modifications. "This is a very serious issue for distressed homeowners," Schroeder said. "Unless discharged in bankruptcy or to the extent of insolvency, debt forgiveness is included in income. In short, you can go from owing the bank to owing the government." Without this protection, homeowners who receive mortgage debt forgiveness after 2025 could face significant tax bills on the forgiven amounts. 4. New Home Builder Credit Ends The 45L New Energy Efficient Home Credit for homebuilders ends at the end of 2025, and it could impact home prices. This credit provided builders with incentives ranging from $500 to $5,000 for meeting certain energy efficiency standards such as Energy Star certification. "Since the loss of a tax credit is the same as a tax increase, homebuilders will feel the loss. Homebuyers may find the price of a home a bit higher to offset the homebuilder's loss," Schroeder said. "It always comes down to the end user." What this means: Homebuyers may face higher home prices as builders adjust to losing these tax More: 7 tax benefits of owning a home What Homeowners Should Do Now Planning becomes crucial as the December 31, 2025, deadline approaches, and these tax benefits potentially disappear. "My advice is to get those energy improvements and clean energy plans moving now," Schroeder said. "Planning has always been the best tax reduction tool." For prospective homebuyers, expect potential price increases as builders adjust to losing tax incentives. "The homebuilder may swallow some of the loss in difficult markets, but in the end, the homebuyer will pay more as homebuilders adjust to the new tax environment," Schroeder said. The bottom line: These expiring benefits represent real money for homeowners. The combination of eliminated energy credits and lost builder incentives alone could cost families thousands in additional taxes and higher home prices starting in is a platform for new home listings with homebuilder story was produced by NewHomeSource and reviewed and distributed by Stacker. © Stacker Media, LLC.
Business Insider
14-06-2025
- Business
- Business Insider
I own a small solar company in Montana and might have to lay off most of my employees. I'm not hiding that from them.
This as-told-to essay is based on a conversation with Ralph Walters, 50, the owner of SBS Solar in Missoula, Montana. It's been edited for length and clarity. BI has verified the number of employees and their salaries. Representatives for the White House did not respond to BI's request for comment. I bought SBS Solar from my former boss in 2020, when it was a pen and paper business with only six employees. Then the pandemic happened and people flooded into Montana, awed by the beauty and, it seems, drawn to solar. I couldn't hire fast enough — business ballooned, and I now have 15 people on payroll. It's a wonderful team, based on massive amounts of communication and honesty. The tax bill could massively shrink my team Most of the guys at the company are under 30, with backgrounds in forestry or construction. Since I've taken over, the minimum rate has risen to $25 per hour, and I don't anticipate anyone will make less than $40,000 this year. We're offering health insurance and paid time off for the hourly guys, and I've been able to give some promotions. That's all in jeopardy now, and my guys know it. Beyond somehow figuring out what to do with the tariffs, the rollback of clean energy tax credits in Republicans' proposed spending bill could force me to make big cuts. I'm especially worried about ending the Residential Clean Energy Credit, which covers 30% of the cost of installing solar in your home. If the bill passes in its current form, I'd probably have to shrink back down to around five employees. It'll be a period of bonuses and thank yous and goodbyes. I cried just talking about it for this article. I considered keeping the truth from my employees My wife and I co-own the business, and we'd chat at night about what would happen if we were fully honest with our staff about the outlook. Would people check out mentally? Would they quit? We could've kept them in the dark until one day saying, suddenly, that they shouldn't come to work the next morning. But that wouldn't have worked on the human level where we operate. So we had a big meeting. We caught everybody up and promised to keep them in the loop. The meetings were emotional, but everyone was understanding, and, in some ways, that makes it even harder. Nobody has left so far, to my surprise. This company has opened life up for the guys on my team. They've bought new cars, proposed to their girlfriends. I can't speak for them, but I don't think they would've done that if they were still in their old jobs. The spending bill wouldn't just affect my business — it would impact solar in Montana overall. Some of our customers are what you'd expect: liberal green energy advocates. But this is a conservative state, and a significant chunk of our business comes from people who don't want to depend on the government for their utilities or much else. Missoula is a pretty wealthy area and at least some people will probably keep using solar without the tax credits, but I doubt the same is true for more rural places where people make the switch purely to save on energy costs. When I first learned about what's in the bill, I felt terror, plain and simple. I don't know what's going to happen with the credits, or my business, or the young guys I employ. What I do know is that I owe my team honesty about whatever it is that comes next.
Yahoo
03-06-2025
- Business
- Yahoo
Maine solar companies ask Sen. Collins to protect federal clean energy tax credits
Sal Miranda (C) and Tony Chang of the nonprofit GRID Alternatives install no-cost solar panels on the rooftop of a low-income household on October 19, 2023, in Pomona, California. (Photo by). Members of Maine's solar and energy storage industry are asking U.S. Sen. Susan Collins to protect the clean energy tax credits that could be scaled back in the congressional spending bill. 'We realize that Congress has an important obligation to cut spending to balance the budget and reduce taxes,' wrote nearly 70 industry representatives in a letter Collins, who serves as Republican chair of the Senate Appropriations Committee. 'However, cutting solar tax credits would be counterproductive.' The spending bill that narrowly passed the U.S. House of Representatives late last month seeks to roll back the clean energy tax credits created in the Biden administration's 2022 Inflation Reduction Act. The bill has been sent to the Senate, where it will likely face changes. President Donald Trump, who late last week released a more detailed version of his spending proposal, has said he backs the House version of the 'big, beautiful bill.' The letter from Maine's solar industry cites three credits in particular they would like Collins to protect. The incentives specifically support manufacturing and the deployment of solar panels. Manufacturing credits attract investment, the letter argues, so removing those would 'pull the rug out from under' solar companies in the U.S, such as the 62 currently operating in Maine. Collins' office did not provide comment by the time of publication. Additionally, industry leaders pointed to recent studies that found clean energy tax credits could lower electricity bills, while repealing them could increase energy costs for ratepayers. Electricity prices in Maine have increased in recent years, in part due to the state's reliance on natural gas, which has seen price swings from global events like Russia's invasion of Ukraine. South Portland-based ReVision Energy often sees customers who install solar panels with hopes of lowering their energy bills, said Lindsay Bourgoine, director of policy and government affairs. In recent years, those customers have been able to take advantage of the Residential Clean Energy Credit, which covers 30% of the costs of qualified new clean energy equipment installed on a residential property. While that credit was designed to run through 2032, and then gradually decrease after, the House budget plan would move up that expiration date to 2026. Though interested homeowners are cautioned about the potential loss of those credits, Bourgoine said solar is still a wise investment — even if initial costs go up. With electricity demand expected to double in Maine by 2050, industry leaders outlined for Collins why solar is the fastest and least expensive way to add energy to the grid. A 2024 report from the Federal Energy Regulatory Commission shows that solar accounted for more than 80% of the new capacity installed nationwide that year. 'If the solar and storage tax credits are reduced or eliminated, it would be devastating to the solar industry, which would cause a ripple effect of negative consequences for Maine and our country,' the industry representatives wrote in the letter. SUPPORT: YOU MAKE OUR WORK POSSIBLE
CBS News
08-04-2025
- Business
- CBS News
Which tax deductions reduce your tax bill the most? Experts weigh in
With the April 15 tax filing deadline right around the corner, millions of Americans are finalizing their 2024 tax returns with one goal: reducing what they owe. Proper planning can save you thousands of dollars on your federal income tax bill, after all, and the right deductions might even turn your payment into a welcome tax refund. Not all tax deductions apply to everyone, however. Homeowners, business owners and those with specific healthcare costs qualify for different write-offs. Below, industry professionals break down the most powerful ones available this filing season. They also share insights on when utilizing a tax relief service might be worth considering. Find out how to get more help with your IRS tax debt . "For many taxpayers, contributing the maximum amount to their tax-deferred retirement accounts will likely reduce their tax bills the most," advises Jeffrey Kelson, partner and national tax co-leader at EisnerAmper, a tax and business advisory firm. The current maximum contribution is $23,500 in 2025, but if you're over 50 years of age, you can contribute an extra $7,500 per year. Taxpayers between the ages of 60 and 63 can make catch-up contributions of up to $11,250. Experts also recommend exploring three other deductions to lower your tax bill: "For most homeowners who use their home as a primary residence, the largest and most common immediate tax deductions are property taxes and the home mortgage interest deduction," says Sarah Gaymon, a certified public accountant (CPA) and director of tax services at Berkowitz Pollack Brant Advisors + CPAs. Property taxes are currently capped at $10,000 under SALT (State and Local Tax) limitations. To benefit from these deductions, you must itemize on your tax return. Beyond traditional write-offs, "home improvement expenses toward energy-efficient homes can yield significant savings," notes Ran Harpaz, founder and CEO of Lettuce Financial, a company offering tax services for solopreneurs. The Residential Clean Energy Credit provides up to 30% of the cost for qualifying improvements such as solar panels. Learn what your IRS tax relief options are here . "The Qualified Business Income (QBI) deduction [is] one of the biggest deductions for small businesses," says Kelson. This allows eligible self-employed taxpayers to reduce their taxable income by up to 20% of their qualified business earnings. Under the QBI, business owners can deduct the following expenses: If you're a high-earning self-employed individual, Harpaz suggests exploring S Corporation status. With it, you pay yourself a reasonable salary subject to self-employment taxes (15.3%). "After [that], the rest of the profits aren't subject to [these] taxes," he says. This structure can save six-figure-revenue business owners thousands in self-employment taxes annually compared to a sole proprietorship. Though it requires a high-deductible health plan, "an HSA (Health Savings Account) has a triple tax benefit," Kelson points out. "You get a tax deduction in the contribution year. It can accrue interest tax-free, and if you distribute it for qualified medical expenses, you don't pay taxes on those contributions." Many employers also match HSA contributions. Don't have an HSA? Medical expenses can still provide tax benefits. If you itemize your deductions, "health-related expenses are deductible if they exceed 7.5% of [your] adjusted gross income," says Gaymon. Here are examples of eligible expenses: Gaymon notes that some states have different income limits and rules for deductibility. This means taxpayers who don't itemize federally may still be able to do so at the state level. While maximizing deductions helps reduce your tax bill going forward, many Americans have existing tax debt from previous years. Using a tax debt relief service could be beneficial if you owe taxes exceeding $10,000. Tax relief professionals can "[negotiate] more favorable settlements [such as] Offers in Compromise, [halt] enforcement actions and [secure] penalty abatements," explains Chad Cummings, a certified public accountant and attorney at The Law Office of Chad D. Cummings. However, Kelson cautions that not all tax relief companies are reputable. "Do due diligence as some charge high fees and aren't always successful," he advises. Look for firms with licensed tax attorneys and certified public accountants. Finally, check online reviews before signing any contracts. Before claiming any deductions, compare them against the standard deduction. "Do the math — if your SALT limit of $10,000, plus mortgage interest, and charitable contributions are more than the standard deduction, then you should itemize," Kelson suggests. For 2024, the standard deduction is $14,600 for individuals, $29,200 for married couples filing together and $21,900 for heads of household. Unsure which deductions apply to your situation? Consult a tax professional. They can identify tax-saving opportunities you might miss and ensure you're maximizing your refund or minimizing what you owe.
