The Internal Revenue Service (IRS) recently released Form 7205, which taxpayers can use to claim the 179D Energy Efficient Commercial Building Deduction. This deduction is available to commercial building owners and architects installing energy-efficient improvements, such as HVAC and lighting systems, and building envelopes.
To qualify for the deduction, the improvements must meet certain requirements. The improvements must be placed in service during the tax year, and they must reduce the energy consumption of the building by at least 25%. The improvements must also be certified by a qualified professional.
The deduction amount is based on the square footage of the building and the cost of the improvements. The maximum deduction is $1.88 up to per square foot in 2022 and up to $5 for 2023.
Taxpayers who claim the deduction must file Form 7205 with their tax return. The form requires information about the building, the improvements, and the certification. Also, for designers, they must provide the allocation information for each property.
The 179D Energy Efficient Commercial Building Deduction is a valuable tax incentive for businesses that want to improve the energy efficiency of their buildings. The deduction can save businesses thousands of dollars in taxes and help them reduce their environmental impact.
How to Claim the 179D Deduction
To claim the 179D Deduction, you must first meet the eligibility requirements. You must be the owner or designer of a commercial building that has installed energy-efficient improvements that meet the requirements of the deduction.
Once determined that you are eligible for the deduction, you must complete Form 7205. This form is available on the IRS website.
On Form 7205, you will need to provide information about the building, the improvements, and the certification. You will also need to calculate the amount of the deduction.
Once you have completed Form 7205, you must attach it to your tax return and file your tax return with the IRS by the deadline.
The Benefits of Claiming the 179D Deduction
There are several benefits to claiming the 179D Deduction. First, the deduction can save you thousands of dollars in taxes. Second, the deduction can help you reduce your environmental impact. Third, the deduction can make your building more attractive to tenants and customers.
If you are considering making energy-efficient improvements to your commercial building, you should consider claiming the 179D Deduction. The deduction can save you money, reduce your environmental impact, and make your building more attractive to tenants and customers.
How to Find a Qualified Professional to Certify Your Improvements
To qualify for the 179D Deduction, your improvements must be certified by a qualified professional. A qualified professional is someone who is licensed or registered to practice engineering or architecture in the state where the improvements are made.
Once you have found a qualified professional, you will need to have them complete a certification form. The certification form will document the energy efficiency of your improvements and certify that they meet the requirements of the 179D Deduction.
Conclusion
The 179D Energy Efficient Commercial Building Deduction is a valuable tax incentive for businesses that want to improve the energy efficiency of their buildings. The deduction can save businesses thousands of dollars in taxes and help them reduce their environmental impact.
If you are considering making energy-efficient improvements to your commercial building, you should consider claiming the 179D Deduction. The deduction can save you money, reduce your environmental impact, and make your building more attractive to tenants and customers. Our tax experts at the National Tax Group are here to help, please contact us for your free assessment today.