Anyone that owns a business or a commercial building needs to be aware of the various tax breaks and deductions that are possible. This tax options are typically available for all types of new commercial construction as well as upgrades or renovations and also retrofit projects in existing buildings. However, to complete your 179D tax deduction claim there are a few steps needed to ensure that you qualify for the credit and maximize your claim potential.
There is a ceiling amount that can be claimed based on the improved energy efficiency of three different subsystems within a commercial building. These include the actual building envelope, the interior lighting and the heating and cooling system. The way to maximize your 179D tax deduction claim is to ensure that all three systems have met the required reduction percentage in energy use. There are some possible partial qualification reductions but to maximize your returns working towards the optimal efficiency is required.
Hiring a Specialist
The first thing that any commercial building owner, architect, engineer or contractor should do is to hire a company that specializes in assessing commercial buildings for 179D tax deduction claim processes. These companies are usually comprised of LEED certified engineers and energy consultants that will provide the evaluation of your current building energy use.
Top companies that help you with your 179D tax deduction claim process will offer this assessment, which may also be caused a feasibility study, as a no obligation option. This will allow you to decide if you have the budget to actually complete the upgrades or to determine if your building is already in compliance.
Preparing Documentation
This same company will then complete a comprehensive study, required by the IRS, known as the Engineering Analysis and Site Inspection. This provides the independent verification of the energy use reduction in the building across the three subsystems.
The company will then complete the necessary report and documentation to support your 179D tax deduction claim. This information is reviewed by the building owner, business accountant and legal staff and then submitted to the IRS to obtain the 179D tax deduction based on the results of the report and independent verification.
