Hot, hot, hot August tax moves can produce cool tax savings
Tuesday, August 01, 2017
Hello August. I’m not going to say welcome because, well, you’re typically not a good guest. August is one of the worst weather months of the year, at least when it comes to basic comfort.
It’s hot. In many places it’s humid. And the thrill of summer’s arrival back in late May has worn thin.
That’s why so many people take time in August to escape. Europeans head out for a month-long late summer vacation. The U.S. Congress takes a traditional recess, escaping Capitol Hill until after Labor Day.
Even many workaholic regular Americans try to squeeze in a break before the kiddos head back to school.
Good for all y’all vacationers. But you shouldn’t take a total break from taxes this month.
August is the perfect time to make some hot tax moves that could help shave a few dollars off your 2017 bill and/or set up strategies that could help reduce your 2018 taxes. Either way, that’s very cool.
Here are a few tax matters to consider now.
Tax help tempering temperatures: Did I mention that it’s hot. Hot. HOT. That means air conditioners are working overtime. And that means big, BIG, utilities bills.
The federal tax break for replacing your old AC unit with a more energy efficient one is no longer available. However, if you want to take advantage of the hot August sun to offset high electric bills, the tax break for certain solar energy systems is still available.
The solar investment tax credit and the residential energy efficient property credit provides eligible businesses and homeowners a 30 percent credit of the amount they invest in qualifying solar-powered systems.
There also are some state tax breaks out there you might want to check out.
Property Assessed Clean Energy, or PACE, programs offer long-term private financing for renewable energy and energy efficiency upgrades to homes and businesses. PACE-enabling legislation is active in 33 states plus D.C., and PACE programs are now active (launched and operating) in 19 states plus D.C. Residential PACE is currently offered in California, Florida, and Missouri.
The PACE website has an interactive map where you can programs operating in your area.
PACE can help in many cases, but folks on fixed or limited incomes usually don’t have the luxury of replacing aging utility systems. They often are struggling to just pay bills, AC ones included.
In these cases, the federal Low Income Energy Assistance Program, or LIHEAP, helps them pay their heating and cooling bills. If you or someone you know needs such help, FAQ page has more information.
Helping is cool and possibly tax deductible: If you are doing OK even with high summer AC bills, consider helping others who aren’t.
Here in Austin, the local NBC affiliate teams up with Family Eldercare every summer to provide low-income seniors, adults with disabilities and families with children with fans and window AC units.
There are similar utility assistance programs nationwide. Check with your utility company, church, favorite community group or the local branches of Goodwill and Salvation Army. Many run weather-related assistance programs.
While you’re giving to such programs to help others, remember that if you itemize, your charitable donations could be tax deductible.
Tax holidays on tap: If you need some cooler clothing to get through the last days of summer, some states can help here.
Sixteen states this year authorized sales tax holidays. The bulk of them are this weekend:
- Friday and Saturday, Aug. 4 and 5, in Iowa and Louisiana,
- Friday, Saturday and Sunday, Aug. 4, 5 and 6, in Florida, Missouri, New Mexico, Ohio, Oklahoma, South Carolina and Virginia, and
- Saturday and Sunday, Aug. 5 and 6 in Arkansas.
Later this month, shoppers can take advantage of similar holidays in Texas (Aug. 11-13), Maryland (Aug. 13-19) and Connecticut (Aug. 20-26).
Do your tax homework: In addition to getting the youngsters clothed and supplied for school in a tax-saving way, do some homework on the available educational tax breaks.
Some tax-favored programs, such as a Coverdell Education Savings Account, can help pay for costs before the kiddos head off to college, while may others — from 529 plans to the American Opportunity Tax Credit to deductions for interest on student loans — help offset the ever-growing cost of higher education.
More monthly tax moves: These are just a few of the hot, hot, hot tax breaks to consider this month.
You’ll find more August Tax Moves in the ol' blog's right column, just below the clock counting down the days until the Oct. 15 filing extension deadline.
Find a shady spot and check them out.
And don’t worry. Before we know it, we’ll be complaining about the cold. I promise!
Not only do you save money with green energy but you help the environment. What is better?
Posted by: Daymar College | Thursday, August 03, 2017 at 07:49 PM