topic Would the 30% solar energy tax credit totally compensate for the 22%-24% extra taxes I will pay if I purchase the solar system using retirement account money? in Retirement tax questions

Would the 30% solar energy tax credit totally compensate for the 22%-24% extra taxes I will pay if I purchase the solar system using retirement account money?

ruzicka — Wed, 18 Sep 2019 20:41:08 GMT

Re: Would the 30% solar energy tax credit totally compensate for the 22%-24% extra taxes I will pay if I purchase the solar system using retirement account money?

Critter — Wed, 18 Sep 2019 21:49:08 GMT

Good question which can only really be answered by doing a test return to see how it works out ... it is a $ for $ credit against the federal tax liability BUT NOT the early withdrawal 10% penalty if you are under the age of 59 1/2 .... for instance if the solar cost is $30K then the credit would be $9K & if you take the $30K out of your 401K the taxes at 24% would be $7200 so the $9K credit would cover it but not any penalty ($20K x 10% = $3K)

Re: Would the 30% solar energy tax credit totally compensate for the 22%-24% extra taxes I will pay if I purchase the solar system using retirement account money?

ruzicka — Sat, 21 Sep 2019 22:13:44 GMT

Thanks