Hey guys. So we always get a tax refund at the end of each year by claiming no dependents even though we have a few.
If we get a solar system installed and to qualify for the Solar Rebate should I change my filing status so I would owe money, in order to claim the credit?
Thank you!
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Tax liability is the amount of tax that you have to pay before that amount is reduced by credits and withholding. In your case you would just get more of your withholding back.
If you have a tax liability the credit is deducted from that amount. You don’t have to change anything.
So does tax liability mean that one would owe money at the end of each year? Sorry taxes make my head spin when you get this in-depth.
Every year we get money back on our taxes, so we owe zero at the end of each year because we have our jobs take out more than required just so we don’t owe. Having a to write a big check to the IRS is a scary thought. Thanks!
Tax liability is the amount of tax that you have to pay before that amount is reduced by credits and withholding. In your case you would just get more of your withholding back.
Ok I think I got this correct. So on line 24 of my 1040, that number say $12,000 is my total tax liability? So if I got a solar setup of $12k or less I would get that money given back to me?
Thanks
The solar credit would be deducted from your tax liability on line 24.
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