Another tax day is gone, probably with all the usual last minute rushing around to beat the deadline. While you might not feel much like celebrating, you can start planning your taxes for the coming year.
A benefit of metal buildings and many accessories is that they confer tax breaks for their owners. A variety of systems are available for installation that can save money on energy and provide tax credits or rebates.
Both home and business owners can benefit from steel building tax breaks. However, it's always important to have a clear understanding of the tax laws.
The following information is meant to provide a brief overview of the ways your steel buildings - be it residential, commercial or agricultural - can benefit you at tax time. However, you should always consult a professional CPA or certified tax preparer to make sure you are taking the right deductions and tax credits according to the current year's tax laws.
Do your homework to identify metal building tax incentives
Gain a thorough understanding of the types of building you erect and any customizations you make. Often eligibility for tax benefits hinges on the way a building is being used and any accessories or custom options you have installed.
For example, over the past several years, tax credits have been available for a variety of energy saving additions or options for your steel building. When you look for a loan to purchase and construct your steel building project, keep an eye out for financing programs and options that are tied to clean energy benefits. Many allow owners to pay back the loan as a voluntary property tax assessment through the existing property tax bill and reduce your payments.
Think local and federal tax Credits and Incentives
You may qualify for tax benefits at the state level as well as through the federal tax code. Look for incentives and credits you may be eligible for when filing state taxes. They may add to federal incentives or complement them. State tax breaks also may have different stipulations than a similar federal benefit.
Capital improvements for homeowners
If you plan to move soon, or your life pattern has you moving every handful of years or so, this particular deduction might not benefit you. However, if you are someone who plans to stay in your home for a while, it makes sense to save receipts from any capital improvements you make to your home or property, and this can include the addition of a steel building such as a garage.
Capital expenditures for business owners
Business owners can benefit from amortized deductions relating to capital expenditures. Unlike "business expenses," which are tracked and consumed in a single year, capital expenditures are those expenses that pertain to assets that will be usable for years into the future. Your tax professional will help you determine how these benefits can be spread out over multiple tax years.
Energy efficiency has been a primary component of tax credits in recent years. Energy-efficient tax credits, which are often provided as incentives to raise awareness and enthusiasm for green building, have been a popular program in recent years. However, these tax incentives continue to change annually.
Some credits came in the form of tax credits meant to offset the costs of new construction or renovation that added renewable energy options to the building’s design. (Not to mention that steel is a highly renewable resource.) The tax savings are not all limited to the building’s owner. Architects, engineers, and contractors can save as well by their design and build selections.
The “green building” movement gained traction for a while, and certifications are still available. Meeting a particular certification such as LEED doesn't necessarily translate directly into tax benefits, though. Have your tax professional help you look for credits and incentives at multiple levels of government to maximize your tax savings.
Here is a brief outline of some of the ways energy efficient systems and upgrades can help you next tax season.
- Energy efficient is the key. Most tax savings for metal buildings come from the resulting energy efficiency of materials and designs. Metal buildings have plenty of space for additional insulation, can be designed to improve natural lighting, and accommodate innovative ways to improve ventilation, heating, and air conditioning.
- Renewable energy systems. Geothermal heat pumps, small residential wind turbines, and solar energy systems may qualify as tax benefits. In most cases, homeowners can write off a specific percentage of the total cost of the project as long as the system qualifies. These tax credits can be enjoyed by both existing homes and new construction projects.
Steel and metal building roofs are ideal media for photo-voltaic panels. Engineered roofing panels are the ideal setting for easy solar panel installation and maintenance. Another bonus? Metal roof systems can be designed to increase energy efficiency as well - via specialized coatings that are tailored to your location and climate. Not only can your solar-supportive metal roof help you gain tax credits, but you'll also benefit from a reduction in annual heating and cooling expenditures.
- Solar water heaters. Solar water heaters are amazingly energy efficient and, for many households, they are the end of cold showers when the hot water's run out. The good news: the energy saved by your solar water heater may help you achieve a rebate or credit. Some restrictions apply regarding where the water heater can be used.
- Miscellaneous tax credits. Unfortunately, as energy efficient building requirements become the norm (hooray!), government tax credits for energy efficient building and improvements are beginning to wane. For example, in 2014, existing homes could gain tax benefits via metal roof installation and replacements, new HVAC systems, energy efficient heat pumps, non-solar water heaters, window and door replacements and more. Some benefits may have been reduced or discontinued.
Unfortunately, tax laws change from year to year. A tax professional can help you stay abreast of any changes that may benefit you down the road.
Interested in learning more about building an energy-efficient, steel-framed building for your home or business? Contact the sales professionals at Whirlwind, and we'll tell you everything you need to know.