Green cleaning services don't just save your business money while making your office safer and healthier; they are also a valuable tax deduction.
Business Tax Deductions for Commercial Green Cleaning Services
With Tax Season just around the corner, many businesses are looking at ways to save money and create revenue while reducing tax liability for the future.
Office cleaning services are, already, a well-known write-off.
However, additional incentives are available for companies that invest in LEED certified, green building technologies, as well as office recycling programs.
Remember to check with your tax preparer or accountant for laws specific to your state, or to identify additional areas where other deductions may be possible.
Tax Breaks and Incentives for Going Green
The three primary write-offs for most businesses will come from:
- Deductions for general cleaning services.
- Incentives for participating in waste reduction programs, and;
- Significant tax breaks for purchasing recycling equipment.
Deducting Cleaning Services
There are two primary areas where businesses can write off tax deductions for green cleaning services.
- Product purchasing, and;
- Service costs.
All products and equipment purchased, rented, or leased for the purpose of cleaning your business, business-use vehicles, or home office are 100% tax deductible, including mops, brooms, vacuums, chemicals, and towels.
However, there is a caveat in writing off the service.
If you or your in-house staff perform the cleaning service yourself, you cannot write it off as an additional expense--you should already be writing off 100% of the cost of staff salary.
Outsourced green cleaning services, on the other hand, are fully deductible, will improve the health of your office and the productivity of your employees, and can significantly reduce costs associated with frequent employee injuries incurred from repetitive cleaning tasks, as well as employee absenteeism due to poorly sanitized surfaces.
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Recycling and Waste Reduction Incentive Programs
For businesses looking to go green without breaking the bank, State and Federal programs are available from;
- The Internal Revenue Service (IRS).
- U.S. Department of Energy (DoE), and;
- The Environmental Protection Agency (EPA).
The EPA does not provide any direct funding or tax credits for waste reduction programs.
However, it does keep a list of available State programs on its website.
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The DoE offers direct funding for businesses looking to improve the energy use and efficiency of their office building, additional programs to incentivize recycling, as well as the purchase and housing of waste reduction equipment on your businesses property.
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IRS Tax Breaks for Going Green
For better or worse, the IRS and State Tax Board's are among the most significant forces driving the adoption of green energy and waste management programs.
Depending on your State, and the nature of your organization's operations, the following incentives or deductions may be available to your business:
- Federal Depreciation Allowance - As of 2010, companies can deduct up to 50% of the cost of recycling property, over the course of an expected five-year lifespan, in the first year of use.
- Income Tax Credits - Many states offer additional tax write-offs for the deduction of a percentage of the cost of recycling equipment purchases.
- Property Tax Exemptions - Additional property tax exemptions may exist in your state for deducting the cost of equipment used in the recycling process, including computers and other machinery, and may not necessarily be limited to businesses whose primary function is recycling.
- Sales Tax Exemptions - Certain, though currently few, states allow your business to deduct a portion of the sales tax incurred for the purchase of recycling equipment.
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References & Resources
Takeaway
Green cleaning and waste reduction programs go hand-in-hand--benefiting you, your business, and your local community financially, as well as providing a cleaner and safer world to work and live in.
One of the most commonly cited reasons for not adopting green programs within an organization is the perception of associated costs.
With the numerous tax breaks, grants, and other financial incentives available, a well structured green program shouldn't just save your organization money; there is a high likelihood that it will significantly improve employee and customer engagement, which can lead to increased productivity and financial growth.
If you would like to learn more about the advantages of green cleaning services for your business, contact us today for a free quote!
In Bakersfield CA, call (661) 395-3009
In Fresno CA, call (559) 473-1790
