The environment is something that has become a major front-runner in good, healthy living recently. More and more people are realizing that if we’re going to survive in this world, we have to look after our environment and become more earth-friendly. Luckily, the United States of America and the wonderful government running our country, has given us so many tax deductions for a green living. It is now worth it for us to actually invest into a greener future. No longer are green living options very expensive and out of our reach, with the help of the government, investing into a greener future also means more tax deductions for us at the end of our tax period.

Hybrid cars are the new generation environmentally friendly cars that are currently being mass-produced by Honda and Toyota. Depending on the specific type of car you are buying, you can get a tax break between $250 and $7,500. It is important to speak to your tax consultant or do research online to see what tax breaks you will get for your specific car. Not only will you essentially be saving money on petrol and fuels that have become so costly, you’ll be driving a car that does minimal damage to the environment.

Insulating your home might seem like a silly idea, but the point of insulation is to keep the heat in during winter and keep the heat out during summer, this will lessen your need to heat or cool your home according to the season. This will not only make your life a lot easier, you won’t need to have an air-cooling solution in every room for example, but it will also cut costs on your energy usage during the cold winter months. The government offers a 30% tax credit or up to a $1500 for any insulation done in your home.

The ultimate way to control your energy consumption and going green is by installing solar and wind energy solutions into your home. This way you have ultimate control over how much money you are spending on electricity but mostly, imagine how much you will save the earth by using its natural resources to fuel your home. The wonderful thing about this tax deduction, that it gives you a 30% tax deduction on ANY amount. So there is no upper amount that you are limited to. This tax break is also going to allowed until 2016, so if you don’t have the money to invest in an alternative energy solution right now, you will have the chance for years to come.

Small business owners need all the tax help which is available. Tax deductions allow small business owners to keep more of what they earn. With a 35% marginal tax rate, the government is a silent partner who takes no risk and over one-third of the profits. Tax deductions are neither simple, straight forward, or intuitive. However, the effort to increase tax deductions is well worth the effort. Tax deductions reduce taxable income for small business owners but do not directly reduce federal income taxes. Both cash and non-cash tax deductions merit review.

Cash disbursements can be expensed or depreciated. Due to the judgment required to determine what should be capitalized, there is some discretion. For example, a local gang paints graffiti on a portion of the side of your building. You decide to repaint the entire side of the building instead of just the portion with graffiti. Is this a repair or should it be capitalized? Some owners would elect to expense repainting the entire building. Business owners should seek counsel from their advisor regarding discretionary tax deductions.

Real estate provides bountiful tax deductions for small business owners. Most real estate owners inadvertently understate depreciation and thus forego available tax deductions. The common practice is to simply separate land and long-life property. Real estate owners can typically increase depreciation by 50-100% in the first 5-7 years of ownership by utilizing cost segregation. Cost segregation can separate up to 130 items that can be depreciated over 5, 7, or 15 years. These short-life items typically comprise about 20-40% of the improvement cost basis. The increased depreciation increases tax deductions.

After a cost segregation study is prepared, the owner can “catch-up” previously under-reported depreciation. Another source of “hidden” tax deductions is a careful review of your fixed asset schedule. Many fixed asset schedule include items which should have been expensed or which have been discarded. Misclassified items are another source of additional tax deduction. In some cases the depreciation life for an asset has been overstated through clerical error. A fixed asset audit typically generates meaningful tax deductions.