American Tax Service

Helping Americans File Their Taxes


The New H&R Block Tax Calculator

As the year ends, many folks start to look at their taxes and assess how much money they might be getting back in their tax refund.

The H&R Block tax calculator 2022 and 2023 is available online for free to estimate your tax refund.

Given that this tool comes in handy, we wanted to break down the H&R Block Tax Calculator’s process and provide a little education on how the H&R Block Tax Calculator works.

The H&R Block Tax Calculator 2023 is Easy to Use

There are numerous “free tax calculators” that you can find online that will help in the process of estimating your tax situation.

The H&R Block calculator is easy to use and very accurate, so long as you know the factors that will affect your situation.

In addition, these tools are effortless to use for individuals with tax situations, such as individual filers with dependents.

Basics of How Your Taxes are Calculated

Numerous factors will affect your tax refund calculation. For example, your specific tax situation will depend on who you are, where you work, and the City and State you live in. 

Without getting into an essay about every calculation, the following data points are also considered.

See How Much Your Refund Will Be

The H&R Block Tax Calculator is one of the better tax tools available on the web.

It breaks down the data into three primary sections: About You, Income, and Expenses.

As mentioned above, this is a simplified way to look at your tax situation and see how much your refund will be, plus the impact of tax reform on you.

The biggest reason this estimator/calculator is so handy is that it brings a lot of variables into its estimate.

For example, things like child tax credits, earned income tax credits, and other family deductions and credits are all considered in the input process.

Once you complete your input, H&R Block gives you a summary report of all your inputs.

This is really handy for those looking at a quick calculation because you can print off the report and compare any facts or information you were unsure about.

The report is printable, and they even offer a free set of tips and a checklist for getting ready to file your taxes.


Tax Credits for Electric Cars

Electric vehicle tax credits can be highly valuable, but there are a lot of confusing rules regarding how they work.

This guide will show you what you need to know about tax credits on plug-in electric vehicles.

It will also answer some of the most common questions people have.

What Are the Electric Vehicle Tax Credits?

The Qualified Plug-in Electric Drive Motor Vehicle Credit (IRC 30D), which is now known as the Clean Vehicle Credit, was amended by the Inflation Reduction Act of 2022 (Public Law 117-169).

A new requirement for final assembly in North America was added as a result of this legislation. This requirement went into effect on August 17, 2022.

Section 30D of the Internal Revenue Code offers a credit for Qualified Plug-in Electric Drive Motor Vehicles, such as passenger cars and light trucks.

The credit for automobiles obtained after 12/31/2009 is $2,500 + $417 plus an extra $417 for each kilowatt hour of battery capacity above 5 kilowatt hours.

The maximum amount of credit available for a vehicle is $7,500.

When at least 200,000 eligible vehicles created by a manufacturer and sold for use in the United States, the credit begins to phase out for that company’s vehicles.

How Much are Electric Vehicle Tax Credits?

All-electric and plug-in hybrid vehicles bought new in or after 2010 may be eligible for a $7,500 federal income tax credit.

The amount of the credit will vary depending on the capacity of the battery used to power the car. State and municipal tax breaks may also be available.

If you purchased a Nissan Leaf and your tax bill was $5,000, that’s all you get at the end of the year.

You’re not going to get the other $2,500 as part of a refund. Furthermore, if part of the credit is unused, you can’t carry it over to the following year.

This credit only applies to purchases of a vehicle. If you happen to lease the vehicle, the manufacturer gets to take advantage of the tax credit instead.

Some manufacturers will lower your monthly payment to take the credit into account, but they’re not obligated to do this.

The size of the battery in the car is one of the most essential criteria in determining how beneficial it is to claim the electric car credit.

For example, the Toyota Prius Prime has a smaller battery, and it’s a hybrid, so you can only get a maximum of $4,502 from purchasing this vehicle.

How Much is the Electric Vehicle Tax Credit for a 2021 Tesla?

The Clean Energy Act for America would benefit Tesla by allowing most Tesla vehicles to qualify for an $8,000 (House version) or $10,000 (Senate version) refundable EV, electric vehicle tax credit while discouraging Chinese EVs from entering the US market.

Tesla, on the other hand, does not utilize unionized workers. Therefore it would be ineligible for the extra $2,500 (Senate version) or $4,500 (House version) credit that corporations like Ford and GM would get.

To help you understand how much each vehicle is worth, look at the chart below:

What Vehicles Currently Qualify for the Federal Credit?

Here are some popular models:

Electric Vehicles Federal Tax Credit
BMW i3 $7,500
Chevrolet Bolt $7,500 (1/1/19-3/31/19) ($3,750, 4/1/19-9/30/19. $1,875, 10/1/19-3/31/20)
Fiat 500e $7,500
Ford Focus Electric $7,500
Hyundai Ioniq Electric $7,500
Kia Soul EV $7,500
Mercedes-Benz B-Class EV $7,500
Nissan Leaf $7,500
Tesla Model 3 $3,750 (1/1/19-6/30/19) ($1,875, 7/1/19-12/31/19)
Tesla Model S $3,750 (1/1/19-6/30/19) ($1,875, 7/1/19-12/31/19)
Tesla Model X $3,750 (1/1/19-6/30/19) ($1,875, 7/1/19-12/31/19)
Volkswagen e-Golf $7,500
Plug-In Hybrids Federal Tax Credit
Audi A3 e-tron $4,205
BMW i3 with range extender $7,500
BMW i8 $3,793
Chevrolet Volt $7,500 (1/1/19-3/31/19) ($3,750, 4/1/19-9/30/19. $1,875, 10/1/19-3/31/20)
Chrysler Pacifica $7,500
Ford C-Max Energi $4,007
Ford Fusion Energi $4,007
Honda Clarity Plug-In Hybrid $7,500
Hyundai Ioniq Plug-In Hybrid $4,543
Hyundai Sonata Plug-In Hybrid $4,919
Kia Optima Plug-In $4,919
Mini Countryman S E All4 $4,001
Toyota Prius Prime $4,502
Volvo XC90 T8 $4,585

The US Department of Energy maintains the entire list. You can sort by vehicle type or manufacturer.

Are There Any Terms and Conditions Associated With the EV Tax Credit?

There are additional rules involving EV tax credits. As well as the rule on how much you can get back from the Federal government, there are a few other things you must take into account:

  • The tax credit is awarded to the registered owner of the vehicle, which is why if you’re leasing, you can’t claim the credit. Instead, try to find a manufacturer that will factor the credit into your monthly repayments.
  • You can’t claim the credit if you’re buying an electric vehicle to resell it. However, this is almost impossible to prove, so plenty of people have claimed the credit anyway.
  • The vehicle’s primary purpose must be for driving within the US. In other words, if you live in Mexico, you can’t just buy in the US and immediately take it to Mexico, at least not for the first year.
  • Only cars built by qualified manufacturers are eligible for full credit.
  • Battery electric vehicles and plug-in hybrids must have battery packs that possess at least 4 kWh of energy storage. They must also be capable of being recharged from an external power outlet.
  • Manufacturers don’t have to certify their vehicles to the IRS that they meet the credit requirements. You can generally rely on manufacturers and their word as to whether a car is eligible. This also applies to electric motorcycles, three-wheel EVs, and other similar vehicles.
  • Please take note that the IRS is well within its rights to reject a request for a tax credit.
  • The car must have a qualified plug-in electric drive motor.

Do the Electric Car Tax Credits Expire?

The government has already begun to phase out electric vehicle tax credits. This is because sales volume is increasing, and they were introduced to encourage this industry.

There’s no set date for when electric vehicle tax credits are due to expire. It depends on the manufacturer.

This arises when a manufacturer sells 200,000 qualifying vehicles. Tesla was the first manufacturer to reach this limit back in July 2018.

That’s why from January 1st to June 30th, 2019, the tax credit has decreased by $3,750.

From July 1st until the end of the year, the credit is only worth $1,875. From 2020, you won’t be able to claim tax credits on a Tesla.

General Motors became the second manufacturer to hit this milestone in the final financial quarter of 2018. From April 2019, qualifying vehicles are only worth $3,750 in tax credits.

Then, from October 2019 to March 2020, the credit drops to $1,875. After that, the credit phases out completely.

Nissan is expected to be the third manufacturer to hit the limit, but as of this writing, it’s still 70,000 sales away from this. However, analysts expect sales to pick up soon.

Can You Refuse to Take Electric Vehicle Tax Credits?

This is a common question from people who want to pass the credit to someone else, such as if the car is used as a loan or test car.

The answer is you can’t pass electric vehicle tax credits to others. Even if the original owner didn’t claim the credit, the new owner can’t claim the credit.

This is especially important to know about if you plan on buying a used car.

You may find that purchasing a new model is worth the additional cost because you’ll get more back from the tax credit.

Are There Any Expired Programs?

Hybrids and clean-diesel cars used to qualify for tax credits, but these were discontinued in December 2010.

In addition, models like the Toyota Prius and the Hyundai Sonata Hybrid don’t have batteries that can be charged from an external source, so they’re no longer relevant for electric vehicle incentives.

Are There Any State Programs I Can Take Advantage Of?

Do remember that the Federal government is not the only body you can claim a tax credit from.

There are dozens of programs run by states and even regions that can offer tax credits on electric cars and other vehicles that take advantage of alternative fuels.

Many states have multiple programs, but the problem is most of them apply only to businesses. A lot of credits are in the form of exemptions, such as inspections and fees.

Some programs even offer access to carpool lanes and regional free or reduced parking.

Retail buyers do have some options, though. They can claim rebates, tax credits, and reductions on vehicle taxes by purchasing a qualifying vehicle.

California is one such state that does this. If you buy or lease a new car, like the Chevrolet Bolt or the Jaguar I-Pace, you can receive a rebate of $2,500.

These programs are in addition to the Federal tax credit. So, Californians can shave up to $10,000 off the cost of a new model.

On the other hand, Plug-in hybrids work a little differently because their batteries are smaller, and they burn some form of petroleum-based fuel most of the time.

Cars like the Chevrolet Volt are only eligible for $1,500 rebates in California.

It would help if you looked up Plugin America for more information. They provide a map of the country and all the different plug-in car rebates, credits, and deductions.

The Department of Energy also offers a similar resource.

Before you shop, look up what you may be entitled to. Unfortunately, many states have either ended or will soon end their programs.

For example, Georgia ended its rebate program back in July 2015.

What about Fuel Cell Cars?

If you purchased a fuel cell car after January 1st, 2017, you’re no longer able to claim Federal tax credits on these cars.

Those who bought before were able to get a Federal tax credit of $4,000, in addition to credits ranging from $1,000 to $4,000.

After that, it largely depended on the fuel efficiency rating of the vehicle.

Some states still have these programs. For example, California continues to offer a $5,000 rebate on the Toyota Mirai.

How to Claim the Electric Car Tax Credit

Online tax software asks you simple questions to fill in the proper forms and helps you claim every electric car tax credit and deduction that you qualify for, and you will get the largest refund possible.

You never have to know the tax laws or rules during the filing process!


What Home Improvements are Tax Deductible?

Can I Get a Tax Deduction for Home Improvements?

Although home improvements cannot be deducted, they may be depreciated, which is especially relevant for homeowners and property owners in the business of renting or leasing, as it can impact their income.

This simply means you deduct the expenditure over a period of time ranging from three to two and a half years, depending on the state’s tax laws and any applicable exceptions.

It is essential to keep receipts and records of these projects and consult a tax professional for guidance.

What Home Improvements are Eligible?

To be eligible for depreciation on home renovation and improvement expenses, you must utilize a part of your house for purposes other than a personal residence.

For example, if a portion of your property is used for business purposes, such as a home office, or as a rental, then you may be able to claim depreciation on home repairs and improvements, like fixing windows in the office or repairing the kitchen and bathroom in the rental unit.

When planning home improvements, such as insulation, driveway repairs, or even a full remodel, it’s important to consider the percentage of costs that can be deducted from your taxes.

Upgrades like kitchen cabinets, painting, gutters, flooring, drywall, plumbing, electrical, landscaping, decking, and fencing can all add value to your home.

You Can Use Your Mortgage to Improve Your Home

If you’re buying a home, you can reduce the costs of your renovation project by making the changes when you purchase the home.

In some cases, mortgage lenders may also include money for any repairs or improvements you need to make in the form of loans.

But the key is this can be added to the price you paid for the home.

Therefore, you can claim any mortgage interest as part of the mortgage interest deduction, including the interest on the loan for the renovations.

Sometimes homeowners have questions about specific uses or examples of deductible home improvements.

As a general piece of advice, it’s important to remember that not all home repairs or improvements are eligible for deductions or depreciation, like upgrading hallways, bedroom content, or non-business-related office equipment.

Reading articles on homeowner tax breaks or consulting a tax professional can provide valuable insight in these situations.

Making Improvements for Medical Reasons

There are home improvements you can also make that technically count as medical expenses. The catch is they must be considered a medical necessity.

For example, you can install entrance ramps, create modified bathrooms, and lower cabinets, widen doors, add handrails, and create special doors.

These are all improvements that can be deducted through the medical expense deduction. with the help of a tax professional.

The deductions must be considered reasonable and must have practical use. Architectural and aesthetic purposes don’t count.

However, any improvements designed to increase the value of your home can’t be deducted through the medical expense deduction.

Get Tax Credits for the Way You Generate Energy

Certain energy-generating modifications can also allow you to lower your taxes. For example, energy tax credits can be worth up to 30% of the cost of installation.

These credits apply to improvements like solar panels, wind turbines, fuel cells, geothermal heat pumps, and solar-powered water heaters.

Green energy systems may also be eligible for tax credits on second and vacation homes. Fuel cells are the exception to this.

The 30% tax credit applies to both labor and installation costs. There are no maximum limits on the amount refunded, other than for fuel cells.

For example, if you spend $20,000 installing new solar panels, you would get a credit for $6,000.

You must apply for this tax credit during the tax year that you have them installed. You must also submit a Manufacturer Certification Statement.

In addition, you should visit the IRS website for energy tax credits for further information.

Capital Gains Exclusion for Home Sale

There’s also a home sale exemption to consider. A qualified seller can avoid paying any capital gains tax on their profits when they sell their primary residence.

This applies to a profit of $250,000 for a single taxpayer and $500,000 for a married couple filing jointly.

The reasoning behind this is that renovations will reduce the amount of profit you have to declare when you sell your home.

So even if you do find yourself paying capital gains tax, the home sale exclusion and your renovations will reduce the amount of tax you pay.

This can be all quite complicated, however. Therefore, make sure you choose online tax software to claim your home improvement tax deductions and pay the least taxes possible.

Using online tax software services can help you claim your home improvement tax deductions and pay the least taxes possible, allowing you to take advantage of the convenience and accuracy that these services offer.

By taking advantage of the various tax deductions, credits, and other tax-saving strategies available, and utilizing the services of a qualified tax professional to ensure proper filing and compliance, you can effectively “insulate” yourself from paying more taxes than necessary.

7 Home Improvement Tax Deductions for Your House


Where Can I Find IRS Form 1040 and Instructions?

IRS Form 1040 is the basic tax form many Americans will use. However, it also recently received an overhaul.

The new Form 1040 will now be the size of a postcard with 1040EZ and 1040-A removed from circulation entirely.

However, there are a variety of new schedules, so you need to be aware that you don’t need to give less information; they’ve just been moved to other forms.

So, let’s look at where you can find IRS Form 1040 and instructions.

Where Can I Get IRS Form 1040?

IRS Form 1040 can usually be found on the IRS website. Alternatively, you can find and file a 1040 form online, and it will be so much quicker and easier.

The IRS encourages people to file online to get their refunds faster.

The Best Way to Fill Out Form 1040

Form 1040 can be managed in a far superior way by using online tax preparation software.

Online tax filing will enable you to enter your information into the system, and the software will do all the calculations.

It will take the information you enter and populate the relevant parts of your 1040 for you.

You don’t need to use a professional tax preparer or an accountant if your tax affairs are relatively simple.

What if I Need to Use Other Forms?

In this case, your online tax preparation software will tell you which forms you need to use. Then, you’ll be able to access the 1040 forms and fill them out in the same manner.


What is Capital Gains Tax on Your Home Sale?

Are you wondering if you’ll have to pay capital gains tax on your home sale?

Many people do not know that a large portion of homeowners who sell their homes can avoid capital gains tax on their home sales.

How Much is Capital Gains Tax on the Sale of a Home?

When selling your primary home, you can make up to $250,000 in profit or double that if you are married, and you won’t owe anything for capital gains.

The only time you will have to pay capital gains tax on a home sale is if you are over the limit.

Many sellers are surprised that this is true, especially if they live in their homes for years.

This is because, before 1997, the only way you could avoid paying taxes on the profits from a home sale was to use it to purchase an even more expensive house within two years.

Taxpayers over 55 had other options. They could take a once-in-a-lifetime tax exemption of up to $125,000 in profits. This required Form 2119 to be filed too.

Thankfully, in 1997, the Taxpayers Relief Act was introduced, and millions of residential taxpayers had the burden lifted.

The lifetime option was replaced with the current sale of home exclusion amounts. This change makes it easier for homeowners to sell their current residence if they want to.

What is the Capital Gains Tax Rate When Selling a Home?

The long-term capital gains will be taxed at 0%, 15%, or 20%, depending on the investor’s taxable income and filing status, excluding any state or local capital gains taxes.

For assets held less than one year, short-term gains are taxed at regular income rates, which may be as high as 34% based on the taxpayer’s individual income.

As a result, investing for more than a year is recommended to benefit from reduced long-term capital gains tax rates.

Do I Have to Buy Another House to Avoid Capital Gains?

No, but there is a limit. Profits earned on the sale of real estate are regarded as capital gains.

However, suppose you utilized the property as your principal residence and met specific additional criteria.

In that case, you may deduct up to $250,000 of the gain ($500,000 if married), regardless of whether you purchase another home.

How Can I Avoid Capital Gains Tax on a Home Sale?

If you used the rules before 1997, it does not mean that you are disqualified from claiming the exclusion on any sales now.

You also don’t have to worry about using your profit from the sale of your home to purchase another home, either.

Another great benefit is there is no limit on the number of times you can claim the home-sale exemption. Usually, you can keep those tax-free profits each time you sell one of your homes.

There are some requirements that have to be met to avoid paying capital gains tax after selling your home.

1. The property has to be your principal residence (you live in it). If it is an investment property, you will have to follow the usual capital gains rules.
2. You have to live in the residence for two of five years before selling it. (This is also a sneaky way of saying you can only sell a home once every two years at the minimum).

The good news is, if your gain does not exceed the limit, you don’t have to file anything with the IRS.

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Capital Gains on Sale of Second Home

If you own multiple homes, it may not be as easy to shelter sale profits as it was in the past.

The Housing Assistance Act of 2008 was designed to provide relief for homeowners on the edge of foreclosure, yet it could cost the owners when they decide to sell.

You used to be able to move into the second property, make it your primary residence, live there for two years, and profit from the gains.

Even when your second piece of real estate is converted into your primary home, you will be taxed on part of the gains based on how long the home was used as a second home and not the primary residence.

Rules for Married Couples

Married couples can profit more from the rule; however, their sales may not always be tax-free.

Either spouse can meet the ownership test. For example, it’s okay if you owned the home for two years but only added your husband when you were married six months ago.

Then, you will pass the ownership test with flying colors.

However, when it comes to the “use test,” both partners have to pass. The good news is if you were unwed and living together for a period that equals two years, the IRS will allow you to pass.

Nevertheless, if that isn’t the case, you won’t get the tax exclusion unless you wait until he meets the two-year mark too.

Keep in mind the two-year eligibility rule when getting to know your spouse. Remember, you are only able to sell a home once every two years.

Therefore, if your new spouse sold a home in the past two years, it will prohibit you from being able to sell until their two-year time span expires.

Determining the Sale of Home Exclusion Amount

Now, once you decide you are eligible to sell and meet the exclusion rule, you have to do some math, so you can avoid pulling out your checkbook after you sell.

But, first, keep in mind that you have to think about more than the money you received during the sale. It is important, but other numbers play a factor too.

You have to consider your gain. It is what decides whether you will have a tax bill.

For example, you could sell your home for $750,000 and not owe any money because you didn’t gain more than $250,000 ($500,000).

1. To get to your gain amount, establish your basis in the home. (Usually, this is what you paid for the residence and the capital improvements that you made)
2. Compare the basis amount to what you received from the sale (excluding commissions and other expenses). This number provides you with the gain on the sale.

Usually, you will find that you got some profit, but it isn’t large enough for you to have to pay taxes on it.

Remember that improvements increase your basis, so a smaller portion of the selling price is considered a gain.

For example, the American Relief Act is 20% for higher-income taxpayers and 15% for many individuals and 0% for some sellers.

Partial Exclusion is Still Good

Even if you cannot meet all of the tests, it does not mean that you will not get any sort of tax break at all.

If you are selling because of special conditions, you are eligible for a prorated tax-free gain.

In this case, you would calculate the fractional amount of time that the two-year use test was met.

Special Rules – Special Circumstances

Military members also have special home sale considerations. Thanks to redeployments, soldiers can find it hard to meet the residency rule and end up paying taxes when they sell.

However, in 2003, it was put into law that military personnel are exempt from the two-year use requirement for up to 10 years, allowing them to qualify for the full exclusion when they have to move to fulfill their duties.

In 2008, a new rule was put into place for those who sell after a spouse dies. Instead of having to sell during the same year the spouse passes, a widow/er can take up to two years to sell and have up to $500,000 excluded from taxes.

Therefore, if you want to sell your home, consider what we have discussed today. You may find out that you won’t have to pay Uncle Sam a dime when you sell your home.

How to File Taxes for Capital Gains Home Sale

Keep in mind, if you file online, they will ask you the correct questions to help you claim the capital gains deductions you qualify for and guarantee you will receive the largest refund ever.