Solar Tax Credit

[Loomisdk]

Hello. We are scheduled to get solar panels on our primary residence this summer of 2022. I am expecting a tax credit of about $11,000 for 2022. How should I plan so that the tax credit we receive doesn't give me a huge refund? I'd rather pay less taxes in now and end up about even during tax time next year.

Thanks!

[drc845443]

Hello and congratulations on your new solar panels.

If you would rather pay less taxes during the year, and use the credit when you file your tax return, you can use the W4/Estimated Taxes planning tools in TurboTax to update your W4 or recalculate your estimated tax payments.

You will find the tools in TurboTax under "Other Tax Situations", select "Other Tax Forms" and then "Form W4 and Estimated Taxes"

If you have already filed your tax return, go to Tax Home, and click on "Add a State" to re-open your 2021 tax return and get access to "Other Tax situations."

You will need to provide your best estimate of your income and deductions/credits for 2022 in order to generate new W4 statements. 

After you have followed all the prompts and answered all questions, you will be able to print updated W4 statements which you can provide to your employer so that they can withhold less tax during the remainder of the year.

If you pay estimated taxes, you can print the updated form 1040-ES vouchers to use when you make your estimated tax payments.