Federal and state tax deduction questions for new system

[showme]

Sort of a last minute plea for information here, but I'm having trouble understanding exactly what is covered, and I'm heading to my tax accountant's this week to get my taxes done. I've read in multiple places that anything involved in building my system is deductible. In my case, aside from my panels, power equipment, batteries, arrays and the poles and concrete they're mounted on, and the equipment used to install them, I had to build an 8x8' shed to house the equipment. This consisted of a few things that didn't cost me anything (the framing lumber is from my property and the neighbors portable sawmill), my labor, etc. which won't be used in the calculation. But I did buy concrete and wire mesh for the floor, a few lights, screws, wiring, hinges, which were all used for this specific purpose.

And then there's the Grunfos solar pump and all the pipe, fittings and miscellaneous, including the controller and hundreds of feet of 1" water line to feed the house and garden hydrant. I also rented an excavator for digging the holes for the array poles, not to mention rebar, sonotube concrete forms and paint. (I used the excavator to set the 16' poles, too.)

So, when I go into my accountants office with this list of materials for not only my power equipment (inverters, breakers, disconnects, service panel, etc.) and all the things I've managed to not lose track of for the shed, will I be laughed at, or is this all legitimate?

Or, in other words, what can I claim for the solar system and the well system, which is powered by 6 panels, a controller and a breaker switch? And, yes, I know I've waited till the last minute, but I told my CPA that I'm running late. Thanks for any information! Lee

 

[chrisski]

So, when I go into my accountants office with this list of materials for not only my power equipment (inverters, breakers, disconnects, service panel, etc.) and all the things I've managed to not lose track of for the shed, will I be laughed at, or is this all legitimate?

Don't trust any advice you get here about taxes, especially from me, and this is more meant where if I was in your situation and went to a tax professional about whether I'd take their advice or run.

I hope he does not laugh at you; and if so, go somewhere else. IMO, you list a lot of things that should not be claimed. He should toss some out. If he does not toss any out, go somewhere else unless he gives those answers with confidence, including something you know is against the deduction like used equipment.

If you read the tax code about roofing not being claimable (I wish this were worded better), why would building a shed be? If so, just throw your new house in there for a 30% discount.

What will happen is you put an amount on a form that goes to the IRS for what you paid. They have no idea what that amount is for until you get audited. If audited, you produce receipts. Most people are highly unlikely to be audited. If you are its not worth the risk.

 

[showme]

The shed is the housing for the system electronics. Putting on new shingles is maintenance, not new build. And, at least for the present, the shed has one purpose, and that is to shelter the RE equipment. I would assume taking maintenance for a previously built home off taxes just to have a newer roof to put your panels on wouldn't cut it.

Anyway, I didn't put the shed on there just because it was not necessary. I didn't put the Bergey wind generator and its tower on there either. It all totalled up to around $33k, and gave me around $9500 tax credit on my taxes. Unfortunately, my CPA told me I won't be able to use it because I don't have any taxable income. Although I have taxes pulled from my Ironworkers pension, he told me I wouldn't have to pay taxes except to get the money I paid in back. He said, basically, that we're paying their office $195 per year to get back the funds that have already been paid in taxes. So I'm going to quit paying those taxes and get my full pension check each month. When I asked him what I'm supposed to do when it's time to file my taxes, he said "don't!" He said they'll hate to lose us, but he's an honest guy, and they want to help their clients, not just take their money. He also suggested that renewable energy credits are sellable, and emailed me a list of possible buyers for my credits. We'll see what happens.

 

[chrisski]

Although I have taxes pulled from my Ironworkers pension, he told me I wouldn't have to pay taxes except to get the money I paid in back. He said, basically, that we're paying their

Go to a new guy. I don’t think he told you right.

 

[Danke]

You can carry the tax credit forward to 2033. So if you ever have any taxable income up till then you can use it.

 

[showme]

Chrisskie- I trust this place. I think he does know what he's talking about. What evidence do you have that he's not right?

Danke- thank you for that information. I had heard 6 years, but wasn't sure. We will be building a new home this year and sell the one we're presently in, but plan on rolling the sale into the build, so I'm not sure if that will help or not. Hopefully, we'll be able to use it. If not, at least I've completed something I've wanted to do since the 80's, and won't be paying escalating electric bills anymore.

 

[chrisski]

Chrisskie- I trust this place. I think he does know what he's talking about. What evidence do you have that he's not right?

Unless your iron workers pension is exempt from taxes, you should still be able to refund those taxes over the next few years.

1099r retirement income is typically taxed at the federal level where the refund would come from.

If the iron workers pension qualifies, I’m wrong.
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There are exceptions at the state level, like some states don’t tax 1099r for military or govt retirements.

 

[DIYrich]

Showme: if your pension and other income is less than the standard deduction, then you don't have to file. If above, then you have to file to claim the credits. You also should file to carry the credits forward.

If your situation is that simple, use a cheap service like tax hawk to do future returns.

If the shed only housed the solar electronics and battery, then I would say it is includable. Store a rake in there, and you may have a problem.