Section 179-D Energy Tax Credits: What Business Owners Should Know

Business energy tax credits are a dollar-for-dollar reduction on a commercial organization's energy bills

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Section 179D:
7 Energy Tax Credits That May Benefit Your Business

  1. Federal Investment Tax Credit
  2. Alcohol Fuels Credit
  3. Accelerated Depreciation
  4. Alternative Motor Vehicle Credit
  5. Business Energy Efficiency Tax Credit
  6. Energy Efficient Commercial Building Tax Credit
  7. Rehabilitation, Energy, and Reforestation Investment Credit

Recent Updates to Section 179 Energy Credits

The Tax Cut and Jobs Act (TCJA) added several provisions to the IRS code including the Section 179 Deduction, which allows business owners to take a bonus depreciation of 100% for qualified assets in the first year (as defined by a cost segregation study) rather than depreciating the assets over a longer period of time. This 100% bonus deduction is only available until 2022 and will then be slowly phased out until it is completely gone by 2027D.

Benefits of Energy Tax Credits

Many business owners are surprised to learn of the compelling tax savings Energy Credits can offer. 

Below is a list of three of the most prominent benefits.

Cash flow

Generates immediate increase in cash flow through accelerated depreciation tax deductions.

Write off

Quantifies property’s major components and leasehold improvements so they can be written off in year 1.

Review

Provides an independent third-party 179-D review and analysis that will withstand IRS review.

Our team of energy tax credit experts can help you if your CPA has questions.

There are so many unique fact patterns and situations that can have a tax impact on how the credits will flow through on your tax return. A CPA generally does not know enough about energy tax credits to truly understand how this works. Using a firm with tax experts on staff will.  Call us today at 212-635-9500 to talk to an energy tax credit expert today.

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