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Video instructions and help with filling out and completing How Form 5495 Payments

Instructions and Help about How Form 5495 Payments

Hey there youtube so today i wanted to go over the residential energy credit available for u.s taxpayers so this credit is available to u.s persons that own a home during the tax year and they spend money refurbishing or rehabbing their home to make it more energy efficient so if you're uh renovating your property or you're adding on to something and you are implementing these so-called green initiatives right so if they're qualified projects you might be able to get a tax credit for um the amounts that you paid to the contractor um to develop the energy efficient improvement right so um so the most common example i see on a regular basis every year is putting in solar panels right so if you decide to add solar panels to your roof um to kind of supplement the cost of the energy in your property right you're not totally off the grid yet but you bought solar panels to charge batteries and run a part of your home you can actually take a credit for those improvements right so in this example we have john smith here john is a taxpayer in the u.s that has a job and he just decided to rehab his property and he uh installed solar panels on the roof the total cost of the solar panels was the 14 500 there so let's see how this uh results in a tax credit for john right so the form that you need to violate with your tax return every year um that you incur these costs is the 5695 and they break that into a couple of categories here right they have solar electric property costs uh water heating energy or sorry wind energy in this case john did solar electric right so um the improvements he made were the solar panels on the roof now when you speak to your contractor or your developer ask them about this credit right because what's really important is you want to make sure that the improvements are going to qualify and then you're going to want to have adequate documentation right so in the event that the irs ever audits you and they say hey look john you had 14 500 of improvement costs the total tax credit you were taking that year is 3 700 can you substantiate the cost and can you substantiate that that it qualified and john will be able to say yes here's the report here's the invoicing everything i got from the contractor i'm good to go if you don't have that then it's going to be an uphill battle for you right because the irs knows that a lot of people are claiming these credits and they're frankly fraudulent right people are just putting down numbers to generate tax credits you do not want to be that person right so john's got the energy costs here 14 500 that was the cost of the panels ...

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