Tax credit eligible items

[fatjay]

When comparing a professional installation to a DIY install it's hard to draw parallels as far as expenses, but there should be some overlap.

I feel like if I would be charged for something for a professional install, I should be able to claim it on a DIY job. There are certain expenses on a DIY job that aren't going to appear on a professional job. Yet the net cost will be cheaper, even with the added expenses.

There are, however, some questionable items.

During the install, I staked off an area and put orange construction netting around it to prevent anyone from wandering on the area. I see professional installers doing such a thing all the time. They would naturally charge me to do such a thing if I paid someone to do it.

- 22x T-posts was $129.80
-100ft of orange 4' safety barrier was $32.27

-My bus bars were copper bars. I drilled the holes but I needed the tap and die, $44.97

-Blades and bits I regard as consumables, but a 18" 1/2" massonary bit is $18.99, and I went through two. Not to mention 3/8" steel bits at $16 each, I probably toasted 15 of them.

-A couple 50' extension cords were $60, running work lights to work after dark.

-$8 sunglasses to keep from blinding myself working in the sun.

-20 bags of concrete to mix and pour footers that I dug out using my $20 shovel.

-12x 8" mason blocks to stabalize the legs during construction since I work alone without a second set of hands.

Basically what I'm getting at is I have 382 line items for supplies I bought for the build totaling $4800 that not everyone would consider part of a solar install. But they were bought specifically for the install and used during it.

 

[glandpuck]

Gotta disagree with you to a point. Anything used for the ongoing operation of the PV system can be claimed and credited. Conduits, switches, wires, mounts, etc. However, I am not certain that renting tools such as jack hammers or a an excavator can be claimed, but maybe.

Any tax accountants out there?

 

[fatjay]

Renting a jack hammer I think should be covered, because if a contractor has to, he's certainly going to pass the cost on to you. And it's not in a contractors best interest to own expensive tools, it's cheaper to rent them and not have to do the upkeep.

Fortunately, I own a jack hammer and excavator, I didn't itemize them or their maintenance on my list though, despite using them. Also they're infinitely reusable. I didn't include the purchase of tools i can reuse on my list.

But I did include things like wood that i used to build bracing to hold things in place, that was not part of the final product. Some of that stuff was used to help me instead of paying for a second set of hands.

 

[Brett V]

Anything that’s part of the installation should be eligible but not any tools you had to buy.

 

[Catmandu]

As with anything, it is all what your accountant feels is defensible at an audit. If you are doing your own taxes, then asking questions here and elsewhere will lead you to your own comfort level based on the knowledge you gain. In any case, the IRS may or may not agree. I have been successfully aggressive with my tax avoidance (not evasion) for many years, so I sort of feel I am ahead of the game at this point and continue to be aggressive.

 

[EPicTony]

Always give yourself the benefit when in doubt. Like Catmandu says avoid but do not evade. Hell the government has 4.7 TRILLION that vanished into some black hole.

 

[TomC4306]

Anything that’s part of the installation should be eligible but not any tools you had to buy.

Tools are a permissible expense.

 

[timselectric]

Tools are a permissible expense.

Yup
Whether they were purchased or rented.
As long as they were needed/used for the installation.

 

[Brett V]

Tools are a permissible expense.

I got some bad information then.

 

[robbob2112]

And from other things I have read the tools must have no other use other than the project... i.e. lug crimpers are good if you aren't an electrician..you haven't got a second use for them like working on a car.

If you buy something, use it, and sell it you can only write off the part you used of the price... this is like renting only longer term.

A socket set would be questionable since it can have many uses...

A clamp meter for someone that never had any other use is good... a dmm has other uses so no.

 

[Rmart30]

This year may be a year and probably a few more after it there should be many many less audits given.
Hopefully they leave the little guys alone and concentrate on the bigger ones.

 

[740GLE]

You forgot to list your transportation costs, figure .70 cents a mile to pick everything up. You rent a trailer for that cement? Or did you have to buy an $7k trailer?

Remember with federal employees being axed left and right (irs especially) just move the decimal point over one position and they’ll never know. I mean doge does it all the time for their reported “savings” so it’s gotta work.

 

[fatjay]

As with anything, it is all what your accountant feels is defensible at an audit. If you are doing your own taxes, then asking questions here and elsewhere will lead you to your own comfort level based on the knowledge you gain. In any case, the IRS may or may not agree. I have been successfully aggressive with my tax avoidance (not evasion) for many years, so I sort of feel I am ahead of the game at this point and continue to be aggressive.

See, I don't agree with that. There should be cut and dry rules, not what I feel is defendable. This is tax code, numbers are numbers. There should be a list of parts eligible, and if it's not on that list, it's not eligible.

 

[Rmart30]

See, I don't agree with that. There should be cut and dry rules, not what I feel is defendable. This is tax code, numbers are numbers. There should be a list of parts eligible, and if it's not on that list, it's not eligible.

should be but thats not the case.
My CPA was fighting the IRS 3 yrs ago because they kicked back a guys expense for buying a new truck on Dec 31st. If he had not had that expense he would have owed that year. The IRS agent told the cpa that there was no way he put that truck into service for that year since he bought it on the last day. While more than likely true the tax law says anything purchased during that year is deductible. So what you think should be black and white isnt always that way.
The CPA went to court and they won the deduction, but still a pita and waste of time for something that should be black and white.

 

[fatjay]

This is probably the primary reason that our government has 4.7 trillion dollars they can't find.

 

[blrmaker]

When comparing a professional installation to a DIY install it's hard to draw parallels as far as expenses, but there should be some overlap.

I feel like if I would be charged for something for a professional install, I should be able to claim it on a DIY job. There are certain expenses on a DIY job that aren't going to appear on a professional job. Yet the net cost will be cheaper, even with the added expenses.

There are, however, some questionable items.

During the install, I staked off an area and put orange construction netting around it to prevent anyone from wandering on the area. I see professional installers doing such a thing all the time. They would naturally charge me to do such a thing if I paid someone to do it.

- 22x T-posts was $129.80
-100ft of orange 4' safety barrier was $32.27

-My bus bars were copper bars. I drilled the holes but I needed the tap and die, $44.97

-Blades and bits I regard as consumables, but a 18" 1/2" massonary bit is $18.99, and I went through two. Not to mention 3/8" steel bits at $16 each, I probably toasted 15 of them.

-A couple 50' extension cords were $60, running work lights to work after dark.

-$8 sunglasses to keep from blinding myself working in the sun.

-20 bags of concrete to mix and pour footers that I dug out using my $20 shovel.

-12x 8" mason blocks to stabalize the legs during construction since I work alone without a second set of hands.

Basically what I'm getting at is I have 382 line items for supplies I bought for the build totaling $4800 that not everyone would consider part of a solar install. But they were bought specifically for the install and used during it.

Everything except the sunglasses. (rename to safety glasses)

 

[42OhmsPA]

I've claimed anything related to the project over the years.

Sorry for the photos of a screen. Busy day at work

 

[fatjay]

Just so I understand correctly, second hand panels/equipment are not eligible, correct?

 

[robbob2112]

Correct - must be new panels and equipment...

There may be one area that is a bit murky but defensible - new/old stock - from a company

And I need to go back and re-read it to see if there is anything about where purchased... i.e. off ebay from a store verse off ebay from a company verse from an individual still in boxes never installed.

 

[fatjay]

That's a good point. My first batch of 18 panels were used, but my second batch of 30 were new old stock from a commercial installer who just wanted to get rid of them. They were left over from a large install. If I understand right, a panel is only eligible for a rebate once. So the question is were they bought and paid for but not used, or where they never transferred to new owner. I don't know.

 

[time2roll]

Include everything purchased or rented directly to complete the installation. Even spare parts and tools if this was the initial use bought and used for this purpose.
The sandwich eaten during install is about the only thing not to include.

IRS does not give deductions... you must take them. Worst case is an audit where they come out and check the panels etc actually made it onto the roof. Worst case some $100 item is excluded and they ask for the $30 back.

Yes second hand is not so good as it would be assumed the original purchaser took the credit.

 

[DIYrich]

During the install, I staked off an area and put orange construction netting around it to prevent anyone from wandering on the area. I see professional installers doing such a thing all the time. They would naturally charge me to do such a thing if I paid someone to do it.

- 22x T-posts was $129.80
-100ft of orange 4' safety barrier was $32.27

Ok to claim.

-My bus bars were copper bars. I drilled the holes but I needed the tap and die, $44.97

Questionable.

-Blades and bits I regard as consumables, but a 18" 1/2" massonary bit is $18.99, and I went through two. Not to mention 3/8" steel bits at $16 each, I probably toasted 15 of them.

Ok.

-A couple 50' extension cords were $60, running work lights to work after dark.

Same as Tap and Die.

-$8 sunglasses to keep from blinding myself working in the sun.

No. Personal.

-20 bags of concrete to mix and pour footers that I dug out using my $20 shovel.

Concrete ok. Shovel, same as tap and die.

-12x 8" mason blocks to stabalize the legs during construction since I work alone without a second set of hands.

Same as tap and die. Although, if you needed 2x4 as temporary support during construction, those would be ok. "wood" is more short-lived than "mason blocks".

Basically what I'm getting at is I have 382 line items for supplies I bought for the build totaling $4800 that not everyone would consider part of a solar install. But they were bought specifically for the install and used during it.

If it is usable away from the site, then it should be capitalized and depreciated. Hard to do without a business.

 

[TomC4306]

Correct - must be new panels and equipment...

There may be one area that is a bit murky but defensible - new/old stock - from a company

And I need to go back and re-read it to see if there is anything about where purchased... i.e. off ebay from a store verse off ebay from a company verse from an individual still in boxes never installed.

I included my used solar panels.
Everything else was purchased new.

 

[robbob2112]

Include everything purchased or rented directly to complete the installation. Even spare parts and tools if this was the initial use bought and used for this purpose.
The sandwich eaten during install is about the only thing not to include.

IRS does not give deductions... you must take them. Worst case is an audit where they come out and check the panels etc actually made it onto the roof. Worst case some $100 item is excluded and they ask for the $30 back.

Yes second hand is not so good as it would be assumed the original purchaser took the credit.

They are pretty clear in their booklet about tools - you can only deduct the portion that is dedicated to the install and only the total value of a tool it it was exclusively used for the install and can't be used otherwise.

I think I could defend new/old equipment so long as it was never installed and therefore never had the tax credit taken for it.

 

[fatjay]

They are pretty clear in their booklet about tools - you can only deduct the portion that is dedicated to the install and only the total value of a tool it it was exclusively used for the install and can't be used otherwise.

I think I could defend new/old equipment so long as it was never installed and therefore never had the tax credit taken for it.

Can you link their booklet about tools? Their website is virtually impossible to navigate.