Tax Credits that Could Help in 2023

We recently wrote about the joy of a home fireplace, not only as a warm, cozy place to enjoy winter indoors, but also a source of federal income tax credits.

What we discovered was that, effective January 1, 2023, highly efficient wood or pellet stoves or larger biomass heating systems may be eligible to claim a 30% tax credit. There is an annual cap of $2,000 but the credit runs through December 31, 2032.

Well, this got us thinking. Now that the 2023 tax season is upon us, what other tax incentives are out there?

Here’s what we found…

Clean Vehicle Credit
Thinking of going electric car, van, or truck this year? There are extra incentives. They are included in the Inflation Reduction Act of 2022. You can get a nonrefundable credit of up to $7,500 on the purchase of a new vehicle. For a used vehicle, the credit is $4,000 or 30% of the sale price, whichever is lower.

(Note: a nonrefundable credit means you can use the credit to reduce only what you owe. You won’t get more than that.)

There is a rather complicated list signifying which vehicles qualify. And who meets the income limitations. We suggest you consult with your car dealer and tax accountant to get the particulars.

Efficient Home Improvement Credit
More energy efficient home improvements are included in the Inflation Reduction Act. This one is a credit of 30 percent up to $1,200 per year on home improvements including: home energy audits, Energy Star-qualified doors and windows, and HVAC upgrades.

Saver’s Credit
Environmental credits for fireplaces, vehicles, and home upgrades aren’t the only opportunities for savings out there. The Saver’s Credit applies if you are working and contributing to a retirement plan.

The credit amounts to 10% to 50% of your contribution to a retirement plan up to $2,000 single and $4,000 married filing jointly. There are income limits where the credits phase out. So check with your accountant to see if you qualify.

Earned Income Tax Credit
Low and moderate income earners may be eligible for the Earned Income Tax Credit (EITC). This includes retirees who may not receive a paycheck but work part-time as a consultant or have a business with a new income.

Though people with no dependents can get a credit, claiming children or grandchildren as dependents increases the credit available. For the 2022 tax year, the credit can range from $560 to $6,935. The amount depends on your tax filing status, income, and number of children.

In 2023 the credit will increase to from $600 to $7,430. Check with your tax accountant or online for more information on whether you qualify.

We hope you can get some of these tax credits. But we are not accountants so always check with the Internal Revenue Service or your tax advisors for help with these or any other tax matters.

And speaking of credits, are you getting all that you deserve on your car and home insurance? Give us a call and we’ll go over your policies. If we don’t have your insurance now, we’ll give you a competitive quote and discuss the right coverage amounts.

And we’ll be sure you’re getting all the insurance credits you deserve. Call today!

Until next time,

Your SZW Team

SZW Insurance is your Utica area Trusted Choice™ independent insurance agent. Call us for a quote on insurance for your home, car, business, or life at 315.792.0000. Or request a quote here.