Solar roofs are becoming an increasingly popular trend with homeowners. More people are realizing the amazing benefits solar panels can add to a roof, a home, your pocketbook, and the environment. All of these factors have made homeowners want to jump into the ownership of solar power.
And when you have a solar roof, you want to gain every benefit it can provide, not just the energy savings. To gain every advantage, hire a GAF Master Elite roofing contractor to install a GAF DecoTech Solar Roof on your home and start seeing the benefits it can bring.
For example, did you know that having solar energy in your home can benefit you come tax season? And who doesn’t want to pay less in taxes? Here are some ways this can happen.
How Credits, Deductions, and Exemptions Work for Your Home
Credits, deductions, and exemptions all help to lower the amount you will pay in taxes. But they work differently. It’s important to understand the difference before knowing what credits and deductions your GAF DecoTech solar roof can offer.
- Deductions work to lower the amount of taxable income you have in a year. Federal and state taxes are then calculated off of the remaining taxable amount.
- Credits are a direct deduction from the taxes you owe. For example, if you owed $20k in taxes and had a credit of $5k, you would only pay $15k.
- Exemptions are exclusions to paying taxes on certain incomes or items. They can lower your taxable amount or completely eliminate tax on certain entities. Dependents are a common example of a tax exemption.
Tax Credits and Deductions
While there are certain credits and exemptions you can deduct from your taxes, our team are solar professionals. We do not claim to be tax professionals who understand all of the tax laws, and you should always consult with a tax professional before filing a claim for your solar investments.
The Solar Tax Credit
This is a federal tax credit that can be applied to both residential and commercial properties. It is also known as the Investment Tax Credit (ITC). This credit allows you to remove 30 percent of the overall cost of installing a GAF DecoTech solar roof from your federal taxes. Despite the overwhelming success and popularity of the ITC, the value of the credit will unfortunately start decreasing after 2019.
Now is the time to take advantage of this tax credit. It makes it much more affordable to go solar and start saving on energy bills as well as reducing your carbon footprint.
However, you must be the owner and purchaser of the solar system to claim the credit. The credit can include 30 percent of the cost of materials, outside labor (You cannot claim labor costs if you install the system yourself.), shipping fees, and a variety of other costs.
You will need to file IRS Form 5695 in order to claim the credit. This form will be added to your Form 1040. Consult with your tax professional before filing any exemption forms or claiming any credit for your solar equipment.
Property Tax Incentive
New Jersey offers a tax exemption to homeowners who implement solar usage in their homes. As improvements are made to your home, whether they are cosmetic, additional square footage, or solar implementation, the cost of the home will increase; and therefore, the property taxes may increase.
This tax exemption is used to reduce the value of the home based on the solar upgrades installed so that you won’t have to pay taxes on the upgrades made. In order to receive the exemption, you will need to apply for a certificate from your local assessor. The exemptions will begin for the year after the certificate has been approved.
This tax incentive can apply to many forms of solar energy, including solar water heaters and space heaters. If you have installed more than just a GAF DecoTech solar roof, be sure to look into the exemptions you can receive on your property. Contact your local assessor for questions you might have.
Sales Tax Exemption
No one enjoys that pesky sales tax that accompanies a purchase. One great thing about New Jersey is that it remains one of the 25 states that completely eliminates state sales tax on the purchase of solar energy equipment.
While this won’t cut your federal or state taxes at the end of the year, it does make your solar equipment more affordable.
Learn More about Taxes and Potential Rebates
For more detailed information on the credits and exemptions mentioned above, as well as to learn about Solar Renewable Energy Credit (SREC) in New Jersey, check out New Jersey’s Clean Energy Program.
Increase Home Efficiency and Save on Your Taxes
Saving on taxes come the end of the year is just one of the benefits a GAF DecoTech solar roof can add to your life. The American Home Contractors team is a GAF Master Elite roofing contractor, so you can be sure you will receive a quality installation of a GAF DecoTech solar roof.
If you desire to gain the tax advantages, savings on energy, reduce your carbon footprint, and increased home value, contact our team to request a quote.
