Thinking about having your company go “green?” Not only is it sustainability important for the planet, but it could also help your bank account. Here are a few ways you can make your business more sustainable while also making sure you maximize your available tax benefits to do so.
Tax Benefits of Green Business
Making your business more energy efficient helps you save money on your energy bills, but it can also get you a nice tax credit to help you save even more. Tax credits are a dollar-for-dollar reduction in your business tax bill. The credit is applied against your gross income, helping businesses keep more of the money they earn at the end of the year. Tax deductions are nice as well, but they come into play after your gross income is determined.
Investing in Sustainable Business
Your business can earn tax credits by investing in specific energy-saving and renewable upgrades. These investments include solar, fuel cells, and small wind investments – all providing tax credits of 30 percent back, as well as geothermal, microturbines, and combined heat and power technologies paying out at 10 percent. The opportunity to invest in smart and sustainable energy technologies helps pave the way for long term business success, smaller energy bills in the middle term, and a nice tax credit in the short-term. The credits are designed to inspire businesses in the U.S. to think green and set aside the money to invest in long-term energy solutions.
Your business is eligible for this investment tax credit if you own or have built the equipment, the property, or renewable technology must be operational the year you take the credit, and the equipment must meet specific performance and quality standards. Legislation from December 2015 extended the credit available for solar technologies and production tax credit technologies into 2019 and 2022, so there is still plenty of time for your business to invest and see the tax benefits, as well.
Other Ways to Go Green
There are several other ways you can make sure your business is doing its part to help the environment. Be diligent about your recycling. Encourage employees not to waste paper products as much as possible. Be smart about energy and electricity when the building is not in use. And make your commitment to green business known throughout the company, with both employees and customers. There may not be a current tax credit or deduction for these activities, but you’ll save money and build a strong reputation within the community you serve.
Claiming Tax Credits and Deductions
Be sure to check with your accounting professional about how best to claim your energy tax credits and deductions. You will likely need to file an application (Form 3468) along with your business tax return. This can be a complicated assignment, so save all receipts and work closely with your tax preparer to make sure they have what they need to do it properly.
For more tips on how to grow your business sustainably, contact the experts at Verum Technical today.