How To Reduce Tax Liability? – Tips From The Experts!

The Inflation Reduction Act created and increased tax credits to encourage energy efficiency for car purchases and home improvements and are also ways to reduce tax liability. CPA and TurboTax Live expert Miguel Burgos explains that the clean vehicle credit can reduce tax liability by up to $7,500, but is non-refundable.

In 2024, you can transfer tax credits to the dealership for the first time, which might lower tax bills. Credits are available for energy-efficient home upgrades and equipment like solar panels, offering up to $2,000 or 30% of the purchase price, helping to decrease tax liability.

According to a published article by SmartNews, taxpayers have the opportunity to receive a credit of up to 30% for the installation of electric vehicle charging stations at their residences, along with various other methods to decrease their tax obligations.

In a published article by Real Simple, tax season can be stressful, but if you did home renovations or upgrades last year, you may be able to save money on your taxes.

Energy-efficient upgrades like insulation, heat pumps, and heat pump water heaters may qualify for a tax credit. Cosmetic upgrades like skylights, new windows, and doors may also be eligible for a tax credit if they improve energy usage.

Energy efficiency credits have caps, such as $1200 per year for energy efficiency improvements and $2000 per year for heat pump and heat pump water heater credits. Decorating expenses are rarely tax deductible unless they are related to business activities.