AP Climate Solutions



The 2018 tax law is designed to encourage business.  But don't go hog wild, just because you're the boss.

Trimming the overhead to zero is the key, and if you're still working don't quit your day job.

"The number of self employed Americans could triple to 42 million by 2020"*


Some words of encouragement: 

How the New Tax Bill Helps Freelancers

Smart Tax Moves*


The businesses we're going to talk about on this website have to do with investing your money in purchases that minimize your normal living expenses and reduce your carbon footprint or someone you care about.  The investments are designed to produce SBI (savings by investment, my acronym.)  That means investing which lowers your daily living overhead yet garners a return at least as good as you could get on a CD.  Most importantly all the investments I'll suggest and explain focus on a healthier planet. 


The First thing you'll need is to be an active participant in your own business.


Get a business license from your city.  My license, for example, is from Berkeley, CA.  Licenses typically costs under $100 a year.  Berkeley is $80 to start and $50 thereafter.  You don't need a EIN number.  You can use your Social security number.  You'll need a business name and purpose.  Make your own name part of the business name, and you don't need to publish a fictitious name statement...go with easier.  Also when you create your business presence on the internet including your initials or name as part of your domain name makes the price cheaper...go with cheaper.  For a business purpose, I chose to be a simple, no traffic-impact-to-my-neighborhood, no inventory business.

" I give advice on climate solutions via the Internet." 

P. S.  I don't have a corner on this market, so you can do the same thing if you want.  Because more conversations create more solutions, and result in more action!!


The First Investment  I'm suggesting will use money from your 401K, IRA or other personal source (not a loan) to buy and install solar equipment on real estate property you don't own in order to share net metering benefits.  You will also be making another clean energy user.  The property must be owned by a trusted friend or relative.  Hint:  When I say trusted I mean both of you have to have a good perspective about money and your relationship.  In my opinion, if you don't both feel the most important thing is your relationship, then you shouldn't go into an agreement together.


Summary:   I installed a solar panel and electric storage system on the home of my significant other.  The 30% tax credit of my total investment has allowed me to pay no Federal Income tax for the year 2018 and I anticipate not paying again in 2019 and 2020, as I can roll the tax credit forward.  Add this savings to the revenue I gain through sharing the net metering proceeds with my hubby and I realize about 13% on a risk free investment for the first three years and 3% on it there after.  Because I'm in business I'm also able to deduct my medical expenses and any investment research expenses on my Schedule C Form .  Meanwhile, if you explore the rest of my website, you'll see I'm diligently at work finding other ways to make sustainable money.


Most 30% tax credits for solar installations have been awarded to people who put it on their own homes.  They use the simple and easy to understand IRS Form 5698.  If you haven't installed Solar on your own home seriously consider doing so in 2019 while the credit is 30%. You don't need to be a business to get the tax credit if you own the property and put it on your own roof.


But there is another more complicated Form 3468, which has gone unloved and ignored by the general public.  Since I don't own the house I live in with my significant partner, and he didn't need the tax deduction anyway, I decided to try out Form 3468 in order to decrease our carbon footprint and get a valuable Tax Credit.  To qualify I started Adele Poenisch Climate Solutions.


Here are the pertinent pages of Form 3468 Instructions, with highlighted key phrases, and my own completed forms.  Although the forms may appear daunting there are really few things that need to be filled in order to qualify for the credit.  You start with Form 3468 which feeds into Form 3800, Schedule 3, 1 and C. 


I went to H&R Block to allow them to navigate the forms the first time through with their software.  Not only did it work easily, but H&R Block has a "Peace of Mind" insurance they sell for an additional $40 that will pay up to $6,000 if they are wrong.  The Investment Tax Credit (Form 3468) not used one year can be rolled forward, and used to satisfy future tax year liabilities. 


I started my company in October so my Schedule C Profit and Loss from Business Statement doesn't show many expenses. But because APCS is a pass-through sole proprietorship business I will deduct my medical expenses this year (2019) as they are now eclipsed by the standard deduction. 


New to the law for Form 3468, Section 48, you can get the tax credit in the year you begin construction rather than have to wait until the solar installation is in service.  This is good because even though the installation may only take a few hours, re-roofing, and inspections by your city and utility company rack up weeks of time.  I first got wind of this change from Energy Sage, a solar company with an excellent down to earth website.


Paying your first installment for the equipment should coincide with your "Mutual Benefit Net Metering Agreement"  signed by yourself and your trusted friend.  Note your are not leasing the equipment, you are sharing in the revenue its benefits produce.  This makes you in an "active business" not a "passive business," and is necessary for the tax credit to work. 


The agreement includes a revenue stream for your business, which I made equal to about 3% of my invested dollar, same as the amount I could get from a CD this year at a credit union.  I added a caveat in the agreement that the revenue stream could go up if the prime increased. 


Once the equipment is turned it is depreciable.   Once turned on start sending a bill to your friend for your share of the revenue.  The amount, which added to the much reduced remaining electric bill, makes a win win for you both.  This income and depreciation will be reflected on Schedule C next tax year. 


Make the agreement with your friend last a minimum of 5 years, a term necessary not to face a "claw-back" of the credit by the IRS.  It can be extended if both parties agree.  When the agreement is terminated the equipment stays with the house, and the invested money returns to your business.


The Second Investment,  Buy an Electric Vehicle in order to be assigned the "EV" rate from your electric company and to be permitted to drive in the commuter lane for 3 years after the purchasing the car.  The EV rate gives you an adjusted cost for kilo watt hours depending on the time of day you use it.  All electric companies are different, so check with your electric company.   For those living in Northern California using PG&E the rate varies from .127 cents / kWh on a summer night to .473 on a summer afternoon.  So, if you are judicious in when you do things, you can decrease your electric bill by as much as 74%.  The rate also varies depending on the month.  With lower rates in general inbetween October 1st and March 1st.   

If you don't have solar panels on your roof, use this savings to sign up for PG&Es Solar Choice Program, which charges an additional .0146 cent per kWh, and get off fossil fuel entirely.   (note: I've quoted the correct additional charge.  PG&E's solar choice calculator is wrong.  I called and we worked out the correct additional charge.  She has submitted a request for the correction.)

Driving my EV around the San Francisco Bay Area I get 87 virtual gas miles per gallon.