What’s the Process for Making a 179D Tax Deduction Claim?

by | Nov 13, 2013 | FInancial Service

A person may make a 179D tax deduction claim in relation to a piece of commercial real estate that underwent improvements to make the structure more energy efficient. It’s part of EPACT 2005, something that was put into effect when the United States Congress sought to reward people for taking steps to explore “green” alterations that could make a building be more environmentally friendly.

It’s important to realize how three parties can take advantage of the benefit: Building owners, building tenants, and the designer, architect, or engineer who’s responsible for making the changes to the building. Keep reading to understand more about what’s involved in making these claims.

Possible Monetary Incentives for a 179D Tax Deduction Claim

If you make energy efficient changes to a heating and air conditioning system, the lighting, or the building’s envelope, those alone could make you eligible for claiming up to 60 cents per square foot. However, that amount could increase to as much as $1.80 per square foot if all three of the areas listed above reduces energy usage by the maximum suggested by the Internal Revenue Service.

The Burden of Proof

In order to receive the perks of a successful 179D tax deduction claim, a person must have the building examined by a qualified inspector. That person will confirm the structure meets the minimum eligibility requirements. Additionally, measurements of energy usage must be captured and calculated with particular software that’s been approved by representatives from the Internal Revenue Service.

Getting Help in the Process

Before getting too deep into the specifics of filing your own 179D tax deduction claim, it’s smart to partner with a construction company that has professional engineers on staff, as well as people who can gauge energy usage. It’s easy to get your questions answered by taking this route, and gain a clear idea of just how much of an incentive you could expect by making an improvement.

A specialized building company could boost your company’s return on investment while also lowering your tax obligations. In turn, your decision to make improvements to a new or existing building and take advantage of this incentive could help you attract more customers, especially if those individuals are concerned with supporting businesses that are environmentally conscious. Make a smart decision and benefit from professional guidance today. Click here for more information.

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