Financial Alternatives

Small Business Clean Energy Tax Credits – Did You Know?

The IRS recently reminded taxpayers of the clean energy tax credits available to small businesses in 2023. These credits include:

- SOLAR POWER CREDIT: Small businesses may get a credit as high as 30% of the cost of switching to solar power, which can greatly reduce or even eliminate electricity bills.
- ENERGY EFFICIENCY CREDITS: Owners of buildings that house small businesses may claim a credit of up to $5 per square foot for efficiency improvements that reduce energy usage and utility bills.
- CLEAN COMMERCIAL VEHICLE CREDIT: This credit may be as high as 30% of the cost to acquire commercial trucks and vans classified as clean vehicles. Clean vehicles include plug-in electric and hybrid vehicles, as well as vehicles powered by fuel cells.

These credits are nonrefundable, so you cannot claim a credit amount greater than the tax your business owes. Nevertheless, they could reduce your enterprise's tax bill. A business tax professional can help you determine whether your business qualifies for these credits, and if so, help you develop a plan to maximize your tax savings.

Reporting Foreign Income and Assets – Did You Know?

The IRS generally requires taxpayers to report both their income from foreign sources and any assets they hold outside the U.S. (such as a foreign bank account). Foreign income may include earned income like wages, a salary or self-employment earnings, as well as unearned income like interest or dividends. Taxpayers who qualify for the Foreign Earned Income Exclusion or Foreign Tax Credit must still report their income on a U.S. tax return to claim these benefits.

Even if you did not receive any income from foreign sources in 2022, you may still need to report foreign assets like bank and investment accounts on your tax return. In most cases, you must also file an FBAR form (Report of Foreign Bank and Financial Accounts) if the total value of your foreign assets exceeded $10,000 at any point in 2022. The FBAR filing deadline is April 15, 2023, however, if you are unable to meet this deadline, FinCEN offers an automatic extension until Oct. 15, 2023. Note that the FBAR is NOT an IRS form, and cannot be filed with your tax return. Instead, FBAR forms must be submitted separately to the Financial Crimes Enforcement Network (FinCEN).

IRS Filing Deadline is April 18th – Filers in Disaster Areas May Have Additional Time

The general filing and payment deadline for 2022 federal tax returns is Tuesday, April 18, 2023.

If you live in a region covered by a federal disaster declaration, you may have additional time to file your return and pay any tax due. The IRS has extended the deadline for residents of certain counties in Alabama and Georgia affected by severe storms, along with many areas of California, to October 16, 2023. Arkansas and Mississippi residents affected by the storm may also now have until July 31 to file and pay payments. The IRS disaster relief webpage (link below) lists all counties and regions that have been granted extended deadlines.

IRS Disaster Relief Page: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations