Top 5 Commercial Property Tax Deductions You Need to Know About
If you own commercial property for your business, or you are a commercial property landlord, you might be feeling the pinch these days. After all, commercial property prices have surged across the US, despite the fact that footfall is nowhere near its pre-2020 levels.
On top of this, you also have taxes for commercial property, which have risen steadily and relentlessly over the past decade. If you want to reduce your commercial property tax bill so that you have more to invest in your growing business, we have got you covered. Use these essential commercial property deductions to save money on business taxes in 2022 and beyond.
- The 179D Commercial Property Tax Deduction
179D is one of those business tax breaks that few people know about, despite the fact that it can leave you with thousands of additional dollars in your pocket. 179D is the business energy efficiency tax deduction. It allows the owner of the building to deduct $1.80 per square foot for energy-efficient construction or improvements. By making your building greener, you can save a huge amount of money. Make sure to click here to learn how you can claim the 179D deduction right now.
- Commercial Mortgage Interest Tax Deduction
Did you know that the interest accrued on commercial mortgage payments is tax-deductible? This is one of the most generous commercial real estate tax deductions out there since it can almost entirely offset your taxes paid on commercial profits. This is because the interest rates are almost 100% deductible. For example, if you are paying $2500 a month in mortgage interest, you can claim a $30,000 annual deduction. Seriously.
- Depreciation Deduction
With business taxes, the system is designed to cushion the blow if you are making a loss. The same applies to losses on your business assets, including the property your business operates out of. This is where the depreciation deduction comes in. One of the most sorely underused commercial building tax deductions, the depreciation deduction makes any decline in the value of your commercial real estate fully tax-deductible. In fact, this deduction applies to up to 100% depreciation in your building. This makes it simply too good to pass up, so make sure to file for this one.
- Opportunity Zone Deduction
The US tax system is attempting to be fairer and to create more opportunities around the country. This is where the opportunity zone deduction comes in. If you invest your capital gains profits into an opportunity zone (i.e. opening a physical business in a low-income area that has been identified as an OZ), all of those profits are tax-deductible.
This is meant to incentivize entrepreneurs such as yourself to spread your knowledge and expertise to places that are in need of it. The OZ Deduction is a tricky one that requires serious expertise, so always use a qualified tax specialist before filing for this one.
Make Your Money Work for You in 2022
By understanding the ins and outs of commercial property tax, you can make your money work for you in 2022 and ensure maximum margins. For more tips on better money management for your business, you have come to the right place. Our dedicated Business section has everything you need to know.