Global warming and climatic changes are becoming more life-threatening by the day. As you go about your commercial operations, you should ensure that you have plans to minimize the effects on the environment. If you are considering getting a new vehicle for your company, think of one that will not emit dangerous gases into the atmosphere. Being environmentally savvy in your firm can save you money and help you get business tax breaks for eco-friendly projects.
Difference between Tax Credits and Deductions
Tax Credits
The majority of business owners have little or no idea about what is meant by tax credits. This is a dollar-for-dollar reduction from your business tax deal. For instance, if you spend $200 on a ‘green’ project, the tax bill is reduced by $200. This happens because tax credits are offered against the business’ gross income.
Tax Deductions
They are as good as tax credits, but the deductions apply after determining your gross income. Therefore, if you want to see significant reductions in your business taxes, it is advisable to leverage tax credits and deductions.
Projects that Get Tax Breaks
‘Green’ Vehicle
There are several tax incentives associated with using an eco-friendly vehicle. They are brought about by the following;
- Selling and using biodiesel, renewable diesel, or a mixture of the two
- Purchasing refueling property, such as gas pumps
- Alternative Motor Vehicle Credit
‘Green’ Investment
You can enjoy business tax breaks if your company deals in energy-saving investments. Such investments include:
- Certified fuel cell property
- Solar illumination and solar energy property
- Approved small wind energy property
The equipment must have been built by your firm, be in service the year you take the credit, and comply with particular set performance and quality standards to qualify for this tax credit.
‘Green’ Construction
Transforming your business building into a ‘green’ construction can help you get discounts on your business tax. If the floor areas you construct can save up to 50% in energy consumption, you will receive a $1.80 tax deduction per square foot.
Business tax breaks are a relief for almost every entrepreneur. Going ‘green’ can help you qualify for such tax credits and deductions. Contact Signal Peak Commercial Capital today to get financial help to transform your enterprise into a ‘green’ business.