Businesses Save Money with Commercial Building Tax Deductions

by | Apr 8, 2014 | FInancial Service

A business needs to be able to save money however possible. It can be expensive trying to open a new business and stay financially afloat until they can reach a point where they turn a profit. The Internal Revenue Service is offering commercial businesses a tax deduction known as Section 179D, enacted within the Energy Policy Act of 2005. A taxpayer is allowed a deduction if they own a commercial building, or they are a lessee of the commercial building that has installed energy efficient interior lighting, cooling, heating, building envelope, hot water systems, or ventilation. In order to use this commercial building tax deduction, certification has to be obtained so verification of energy efficient requirements can be certified by a third party.

EPACT Rewards the Owners of Commercial Buildings

Since commercial buildings must now comply with new standards for higher energy efficiency, the IRS designed Section 179D to reward them. Section 179D states that a building is eligible for savings when they upgrade their buildings HVAC, building envelope or lighting, for up to $1.80 per square foot. This creates a great tax savings for owners of commercial buildings that are energy efficient, retrofitted, or properties that are multi-family built since 12-31-2005. These savings also apply to engineers, ESCOs, designers and architects of building projects that are energy efficient, as well. Buildings that are LEED certified are also easily qualified.

Be Sure to Use this One-Time Accelerated Depreciation Deduction

The benefit of being able to take a tax deduction to improve energy efficiency in commercial buildings is a great benefit for many business owners and builders. This tax law is one of the most underused and understood, but offers significant tax deductions for commercial

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