This story appears in the
January 2006 issue of
Entrepreneur.
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You can now save energy and reap tax savings, too, thanks to the
Energy Policy Act of 2005.
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.
Great falls, Virginia, writer Joan Szabo has
reported on tax issues for 19 years.