Energy efficiency allows some consumers to legally double their tax breaks
Friday, November 05, 2010
The IRS is no friend of my favorite treat, ice cream.
It's not, to my knowledge, that Uncle Sam targets the dairy industry, although I'm sure some dairy farmers will soon be sending me detailed e-mails explaining just how they are overtaxed.
What the IRS opposes is my favorite ice cream option: big, fat, tasty double dips.
In tax parlance, double dipping is a no-no.
Essentially, it means you can't use the same claim for two different federal tax breaks. You have to determine which IRS tax benefit works better for your situation and then claim that one. Singular.
Claiming state tax savings: Sometimes, though, tax breaks are complementary and could even produce a sort of acceptable double dipping.
That's the case with some Energy Star state sales tax holidays.
Through Sunday, North Carolina shoppers don't have to pay state or local sales taxes on qualifying energy efficient appliances.
In West Virginia, that state's Energy Star sales tax holiday has been going on for months and will run through Nov. 30.
And last month, similar sales tax holiday savings were available to Virginia shoppers who wanted to upgrade their energy efficiency levels.
In all cases, the sales tax holdays provided, or are still offering, quite nice savings for consumers on the state tax front.
Federal tax break, too: But it gets better.
When federal Form 1040 filing time rolls around next year, these energy conscious North Carolina, West Virginia and Virgina consumers also might be able to use their purchases to claim the federal energy home improvement tax credit. And that could shave as much as $1,500 off an IRS tax bill.
Technically, this isn't double dipping because one is a state tax break and the other is a federal tax benefit.
But one thing is the same.
Getting two big scoops of mocha almond fudge (or whatever your favorite flavor is) and getting twice the tax savings on one item are both definitely satisfying!
- North Carolina's Energy Star sales tax holiday runs Nov. 5-7
- West Virginia's three-month Energy Star sales tax holiday is underway
- Virginia energy-efficient sales tax holiday
- Welcome summer with energy-related tax breaks
- Sales Tax Holidays 2010
- State use taxes tend to be useless
- State Tax Departments
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