What is an Energy property deduction?
An energy property deduction is a federal tax incentive allowing businesses to claim significant deductions and credits for investments in qualifying energy-efficient equipment, renewable energy systems, and clean vehicles. These deductions include the Investment Tax Credit (ITC), which provides up to 30% credits for solar installations; the qualified commercial clean vehicle credit, offering up to $40,000 per vehicle; and Section 179D deductions, up to $5.00 per square foot, for building efficiency improvements. Energy property deductions combine direct tax credits with Depreciation and amortization benefits through MACRS and bonus depreciation provisions. Qualifying properties include solar systems, wind energy equipment, geothermal systems, fuel cells, energy-efficient HVAC systems, LED lighting, and electric commercial vehicles that complement traditional Vehicle expenses strategies.
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