Kris:
I'm not a tax professional. Just a self employed business owner who
does his own taxes.
Your post states "...that the 30% tax credit does not apply to
self employment tax."
1. Personal Residence
Is the person involved filing a personal Form 1040
return with their self employment income reported on Schedule "C"?
Is the PV system being installed on their personal residence? If
this is the case, Self Employment Income is on 1040
line 12 and is part of the Adjusted Gross Income (AGI) on which
the taxes owed amount (1040 line 47) was based.
Assuming only a solar PV system is involved, then Tax Form 5695 residential
energy credit uses the taxes owed amount (from 1040 line 47),
which sets the upper limit for the credit in a given tax year. If
30% of the installed PV system cost is less than taxes owed, you
subtract the whole 30% amount. If 30% of the system costs exceeds
taxes owed, you can carryover the excess (unused) credit to the
next tax year. Whichever applies, the residential energy credit
goes back to 1040 line 53.
"Self Employment Tax" (from Schedule SE) is one of
the "Other Taxes" that are added on AFTER all of the various
credits, including the residential energy credit, resulted in
what's left on line 56.
2. Business System
I don't think this is applicable to your query, but if a
business owned PV system is involved, and does not involve a
personal 1040 tax return or a residential PV system, the 30%
residential energy credit does not apply - the Form 3468
investment tax credit is used.
Regards,
Gary Willett
Icarus Solar
Irving TX
On 3/27/15 10:15 AM, Kristopher Schmid
wrote:
I have been told by a client who was told by his
tax advisor that the 30% tax credit does not apply to self
employment tax. Can anyone confirm or deny this assertion?
--
Shine On!
Kris Schmid
Legacy Solar, LLC
864 Clam Falls Trail
Frederic, WI 54837
www.legacysolar.com
715-653-4295
NABCEP Certified PV Installer
Licensed Wisconsin Master Electrician
BSEE
_______________________________________________
List sponsored by Redwood Alliance
List Address: [email protected]
Change listserver email address & settings:
http://lists.re-wrenches.org/options.cgi/re-wrenches-re-wrenches.org
List-Archive: http://www.mail-archive.com/[email protected]/maillist.html
List rules & etiquette:
www.re-wrenches.org/etiquette.htm
Check out or update participant bios:
www.members.re-wrenches.org
|
_______________________________________________
List sponsored by Redwood Alliance
List Address: [email protected]
Change listserver email address & settings:
http://lists.re-wrenches.org/options.cgi/re-wrenches-re-wrenches.org
List-Archive:
http://www.mail-archive.com/[email protected]/maillist.html
List rules & etiquette:
www.re-wrenches.org/etiquette.htm
Check out or update participant bios:
www.members.re-wrenches.org
