Tax Breaks for Going Green
Going green can be a matter of personal choice — of wanting to make your business better for the environment. But going green can also be good business. With the many tax deductions and credits available to business owners, making your company more sustainable can pay off when you do your taxes.
Improving Your Infrastructure
Wherever you can make the infrastructure you need to operate your business greener, you may be eligible for a tax credit. If, for instance, you need a vehicle to complete your daily business (making deliveries, going to meetings, and so forth), you may be eligible for a tax credit if you choose a hybrid vehicle. Not all hybrids on the market are eligible, but you can use the credit for both passenger vehicles as well as delivery vehicles. The IRS maintains a full list of commercial vehicles eligible for the tax credit.
There are also tax credits and deductions available for making your office more energy efficient. Whether you build a new building entirely, engineering the building to use a minimum of energy, or you upgrade your existing space, by adding energy efficient appliances or improving the building's structure, there are a number of different deductions and credits available. More information about the credit for commercial buildings is available from the IRS website.
In particular, improving lighting can be one of the best tax deductions for a small business. Because you can change out lighting relatively easily, compared to other retro-fitting, and it can have a clear and immediate impact on your energy usage, especially in a well-lit retail space or office, it can offer a good return on your investment. There are some limits, including a maximum deduction of $1.80 per square foot of building.
Using Renewable Energy
By using renewable energy, your business is eligible for tax deductions. If you find yourself in a position to provide some of your own energy, however, even as simply as by adding solar panels to your office's roof, you may qualify for a tax credit. More energy-related tax credits are available to manufacturing facilities and other specific types of businesses.
Helping Other People Go Green
Depending on your business, you may be able to claim tax deductions and credits for helping your customers make more sustainable choices. For instance, if you are a contractor building homes, you're eligible for a $2,000 tax credit for every energy efficient home you build, as long as it meets certain standards set forth in the Energy Policy Act of 2005. Deductions are also available for ...
