Florida is known as the lightning capital of the country, and between lightning, tropical storms, hurricanes and accidents, power outages are a frequent fact of life. If it’s short-lived it may be just an inconvenience, but if your health or business rely on a steady source of power, even the briefest outage can be a severe problem. The best way to ensure you have a steady source of power is to install a home standby generator.
In addition to the obvious advantages of having a reliable power source, you can also use some of the cost of a generator as a deduction on your federal income tax. With three different ways to take advantage of the tax code, it’s likely that you can find at least one way to deduct a portion of the costs of installing a home standby generator.
Capital Gains Tax Credits
As with all the advice in this post, check with a tax attorney or accountant to determine your individual tax liability and the ability to use any credits. If you sell a home and purchase a new one within a certain amount of time, you’ll avoid paying a capital gains tax on the sale of your old home. If you’ve done this more than once, however, you may still owe taxes on the capital gains. Selling a home and not buying another one will automatically cause you to be liable for the taxes, but if you’ve installed a whole house backup generator, you may be able to take a capital gains tax credit, reducing your tax bill at the end of the year.
Energy Tax Credits
The federal government subsidizes renewable energy such as wind and water, but many states will give you an energy tax credit if you install a natural gas, whole-house generator. This is because natural gas is a greener fuel, creating less of a carbon footprint. If you opt for a home standby generator that has the ability to run on biofuel such as that created in landfills, you may be eligible for an additional tax credit or even an alternate fuel grant. Your state energy department will have all the information needed available for you and your accountant.
Medical Needs
If your doctor will verify that a continuous supply of power is crucial for your health and well being, you may be eligible for a tax credit for your generator. You’ll need to itemize your deductions at the end of the tax year. Once itemized, every bit of legitimate medical expenses over the legal limit, which is 7 to 10 percent of your gross income, is deductible. The power has to be a crucial factor for keeping either you or a family member alive and healthy, and you’ll have to include a certified letter from a medical doctor detailing the medical condition and swearing that a constant power supply is a medical necessity. Depending on your income, you may be able to write off some or even all of the expense of having a backup generator installed in your home.
Natural Disasters
While not a tax deduction, FEMA does offer reimbursements for electrical generators in case of a national or local emergency. The program starts when your governor declares a state of emergency, and it will continue until the power comes back on. Have your whole house backup system installed or buy a portable generator during that time, and you can be eligible for getting the entire cost of the generator reimbursed.
There are multiple ways to reduce the cost of installing a home standby generator, but the benefit of having reliable power is priceless. Call us today to discuss how we can help meet your needs while saving you money.
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