A home generator is a valuable addition to any property, as it provides a reliable source of power during outages, storms, and other natural disasters. Generators are especially important for those who rely on electricity for essential medical equipment and those who live in areas prone to frequent power outages and lapses in coverage.
Having a home generator installed will ensure that your home remains functional and comfortable during power outages. This added layer of protection can protect your appliances, electronics, and even your safety and security. Home generators allow you and your loved ones to continue daily activities and routines without worrying about inconveniences like cold water, spoiled food, and other uncomfortable situations brought about by a lack of electricity.
Tax Savings for Home Generators?
Among the many benefits of home generator ownership are tax savings. As most homeowners look for ways to save on their tax liabilities, the purchase of a home generator is a smart move. Here are some ways you might consider cashing in on savings with this valuable purchase.
Business Expense Deductions
If a portion of your home generator use is for business, then the cost to operate it and the cost of the generator itself may be considered tax deductible as a business expense. In order to claim these tax benefits, you’ll need to itemize deductions on your tax return and provide documentation of the business use of the generator. Take these steps to report and claim tax benefits:
- Keep accurate records of how it is used for business purposes
- Ask your tax professional how to document use
- Include the cost of your generator as a business expense on Schedule C or Schedule F
- Claim the home office deduction option if you operate your business out of your home
Medical Equipment Deductions
For those with medical needs requiring specialized medical devices, a generator is an invaluable source of constant electricity that you can use to power your equipment. With the increasing frequency and severity of natural disasters, a home generator can provide peace of mind to you and your loved ones, ensuring your comfort and safety during times of crisis.
The process of claiming your generator for use with medical equipment is similar to that of business expense reporting. Keeping accurate records is key to ensuring that your generator complies with the deduction law. You’ll need data, including the purchase date and price, and how it is used to power various medical devices in your home. Tax laws regarding deductions can change from year to year and from state to state. Make sure you consult a tax professional for more detailed advice and to ensure that you’re following the most current tax laws.
Disaster Loss Deductions
If you are using a home generator as a source of backup power during disasters and outages, you may be able to claim a tax deduction for the cost of the generator, as well as a percentage of operating costs. Make sure that your generator is used exclusively for backup power during outages and other natural disasters. If you itemize your deductions, you’ll be able to deduct the cost of the generator as a loss on Schedule A if it was damaged or destroyed in a federally-declared disaster. In cases where a generator is not damaged or destroyed, its cost can be depreciated over several years as a capital expense.
Federal Energy Tax Credits
Generators used to generate electricity for your home may be eligible for federal energy tax credits if it meets certain government criteria. Your generator may qualify as a renewable energy source if it is powered by solar, wind, geothermal, or fuel cell energy. Researching guidelines for energy efficiency will quickly reveal whether your particular model qualifies for tax rebates.
It’s important to note that federal energy tax credits have expiration dates, capacity limits, and other requirements that must be met to receive federal money. Consulting with a tax professional can shed some light on whether your generator and intended use are in line with state and federal regulations.
Home Office Deductions
More and more people are working from home these days. In cases where you have remote or hybrid work, it may be in your best interests to set up a home office space dedicated to work, as this can yield some truly impressive tax deductions and benefits. Make sure you keep accurate records of your business use of the generator, including dates of operation, nature of use, and any other details that provide proof of intended use. If your generator is used to power equipment that you use for your business, you may be able to claim depreciation for the generator as a business asset over a period of several years. Make sure you comply with federal, state, and local laws to take advantage of tax savings.
Choosing The Right Generator For Your Home
Choosing the right generator for your home can be a convoluted process, with many factors to consider. Take these steps to help you choose the best backup generator for your needs.
Determine Your Power Needs
One of the most critical steps in choosing a generator is determining the power you need during a power outage or natural disaster. Consider those appliances and devices you need to keep running and their individual power requirement when deciding how big to go.
Choose Your Size
Once your power needs have been outlined, you can easily select the correct size generator for your home. Generators are measured by their output in watts or kilowatts. A generator’s output determines the number of appliances and devices you can run simultaneously.
Select Fuel Type
Decide which type of fuel would be best to use for your generator. Standard generators use propane, natural gas, and gasoline to power your home. Greener sources of energy, such as solar, wind, and geothermal, provide cleaner energy. However, they may not be quite as reliable as other types of generators when it comes to supplying power to needed appliances and devices.
Look for Specific Features
In looking at the generator as an investment, you’ll easily justify any extra money spent as an extra measure of safety and security for your home. Basic generators provide power to a few appliances or rooms in your home, while top-of-the-line models have additional features like automatic shut off, low oil shut-off, and transfer switches that make maintaining power that much easier for you and your family. Keep in mind that with additional options comes a higher price tag.
Let’s Get You Up And Running Again!
At Arc Angel Electric, we offer top-notch strategies and solutions that address all of your power needs. Serving valued clients across Georgia and South Carolina, we provide services related to electrical panel maintenance and repair, electric service and repair, generator service and installation, home rewiring, new outlet installation, and much more. If you are interested in learning more about tax savings related to home generator installation and use, contact us today!