I operate my business out of the house. Can I claim my 30% federal solar rebate AND also get by with more business deductions and claim the 1099 contractor (making him fill out W9) as a business expense on top of that? What is my best bang for the buck. The project cost $10k, and I know I'm getting a minimum of $3k off my FED taxes next year form rebate. Can claim more deductions in some way (and how?) since it the panels are used primarily for my LLC?

  • What do you mean "primarily for my LLC"? Isn't it your home? – littleadv May 24 '13 at 18:28

Typically you can only claim as business deductions those expenses which strictly relate to your business. In some cases, if you have a dedicated home office in your house, you can specify that expenses related to this space (furniture, etc.) are business expenses because it is a dedicated space. For example, I know of someone in sports broadcasting who claimed several TVs as a business expense, but these are for a room in his house that he uses only for watching games related to his work responsibilities, and never for entertaining, having friends over, etc.

I think it will be difficult for you to count any portion of this type of installation as a business expense as it would relate to both your business as well as your residence. If you intend to try to get this deducted, I would strongly recommend consulting a CPA or tax attorney first. I think it will be difficult to prove that the only benefit is to your LLC if your electricity bills/credits are co-mingled with those for your residence.

Best of luck!

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  • Thanks for the comments. I already deduct 30% of my home mortgage and utilities for business, and amortize my EV (electric vehicle for business that plug into those panels), so why not deduct 30% of the labor and materials spent for the panel array installation IN ADDITION to the federal rebate which I get as a nonbiz home owner? 30% of the energy produced from the panels are ONLY used for business. So can I claim both homeowner rebate and the business expense at the same time? it seems totally reasonable to me. Just wondering if there is an exact answer for this, So far I haven't seen one. – sov May 28 '13 at 20:44
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    You can claim them both, but the total deduction must be split between the two, you can't deduct the full amount for each purpose. Also, you would need to show that the business portion of the deduction is for spaces dedicated to your business. Perhaps you could have the utility company install a secondary meter? Again, if your bills are co-mingled between home and business, you are working in the gray, so please seek professional tax advice. – JAGAnalyst Jun 13 '13 at 16:41

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