Entrepreneurs should check out a section of the law that allows commercial property owners to deduct the cost of installing energy-conserving improvements. These must be made under a professionally certified plan approved by the IRS that shows how the steps you take will reduce your total annual energy costs by at least 50 percent. If you can't reduce costs by that much, you may qualify for a partial deduction of up to 60 percent of building costs per square foot. This benefit is only available for improvements placed in service in 2006 and 2007, and the deduction cannot exceed $1.80 per square foot.
Your plan must involve interior lighting, heating, cooling, ventilation, hot water systems, or any part of the building separating the interior from the outdoors, including windows, walls, ceilings and insulation.
Another tax break is available to business owners who invest in solar power. Under the new law, tax credits for commercial solar installation will increase from 10 percent to 30 percent if installation occurs between January 1, 2006 and December 31, 2007.
To take advantage of these new benefits, contact your tax advisor to determine how best to draw up your plan. For more details on the new deductions, visit www.irs.gov.