New Net Operating Losses Policy

In November 2009, the federal government introduced the “Worker Homeowner and Business Assistance Act of 2009.” The Act was designed to stimulate the economy by reducing the taxes for struggling businesses and homeowners. 

For businesses, the new law means that businesses can carry their Net Operating Losses (NOL) for five years, as opposed to the three years allowed by previous legislation.  NOL refers to tax deductions that exceed the company’s gross income.  Companies that claim NOL are eligible for speedy refunds that they can use for a variety of improvements including structural and equipment upgrades.

Green Energy Savings

Businesses can maximize their energy savings by using the windfall to purchase energy-efficient equipment including:

• Installation of green energy sources such as solar panels or wind turbines
• Improvements to insulation
• Replacement of old windows with airtight, energy-efficient ones
• Placement of energy optimization and power factor correction equipment

These types of equipment can ultimately save a business big money on a monthly basis through reduced electric bills, and decreased equipment downtime and maintenance costs. Also, some equipment may qualify for tax credits as well so be sure to tell your accountant all the energy efficient upgrades you made for your business.

Why Make Energy Improvements?

Many businesses have moved to make green improvements in the past decade, and there has never been a better time to go environmentally friendly in the workplace.  Aside from some tax credit benefits, business owners can realize significant long-term savings through energy optimization.

• Energy optimization decreases electrical waste directly from the breaker, improving overall efficiency.
• Green appliances significantly reduce electric bills, for long-term savings that last for the life of the appliances.
• Investing in energy-efficient lighting both reduces wasted electricity and eliminates the production of excess heat, which necessitates additional cooling.

For savvy business owners, the time is ripe for investing in energy efficiency.  Taking advantage of the current policies can translate into dramatic savings in the long run.

Home Improvement Tax Credits

Homeowners who make environmentally friendly improvements to existing homes may be eligible for tax credits up to $1,500.  Improvements may include installation of energy-efficient lighting, windows, insulation, doors, roofs, and heating/cooling (HVAC) equipment. Guidelines for the credit include the following:

• The tax credit will equal 30% of the cost, up to $1,500.
• To qualify, improvements must be made between January 1, 2009 and December 31, 2010.
• The home must be the taxpayer’s primary residence.  New construction homes and rental properties are ineligible.

Residential Renewable Energy Tax Credits

Consumers who install renewable energy sources for their homes are also eligible for tax credits.  The credit will equal 30% of the purchase price, and the 2009 Act eliminated the cap on renewable energy tax credits.

• Eligible improvements include installation of solar energy systems, such as solar water heating and electric systems.
• Geothermal heat pumps, microturbine systems, residential fuel cells, and small wind systems also qualify.
• Systems must be placed in service before December 31, 2016.

Automobile Tax Credits

Both individuals and businesses who purchase new hybrid cars may qualify for a tax credit.  The new vehicle must meet emissions standards and use less gasoline than other vehicles in the same weight class.  Other provisions of this tax credit include the following:

• Vehicles must be purchased by December 31, 2010.
• The tax credit amount depends on the vehicle’s weight and fuel economy.
• The credit is also tied to the volume of vehicles sold by each manufacturer.  Once a manufacturer has sold 60,000 vehicles, the tax credit for that manufacturer’s vehicles will be phased out over 15 months.
• Vehicles that use fuel cells, alternative fuel, lean-burn technology, or diesel may also be eligible for tax credits.

Ultimately these tax credits encourage consumers to make environmentally sound choices about home maintenance and transportation.  In conjunction with measures like electrical current optimization, energy-conscious habits, and energy-efficient lighting, the current government incentives for energy efficiency and renewable energy sources give consumers more reasons than ever to go green.

• Myth #1: Any kind of protection is better than no surge protection. Without any surge protection, the incoming blast hits only the main power supply and will not impact the system ground level at all.  On the other hand, an inadequate surge protector will distribute the surge throughout the system, potentially damaging equipment. 
• Myth #2: UPS offers reliable surge protection.  Most UPS units are designed for microcomputers, so they simply combine traditional metal oxide varistor (MOV) surge suppressors with back-up battery sources.  Although UPS protectors may be more expensive, they do not necessarily provide more effective coverage.
• Myth #3: Hardware damage is the only risk during an electrical surge.  Since computers send data as bit streams, a power surge actually interrupts data transmission.  The interruption can erase data and corrupt files.  That irreversible data loss can translate into significant economic losses, especially for businesses.
• Myth #4: Surge protectors last indefinitely.  Surge protectors use metal oxide to disperse power surges.  Over time, these components wear down and corrode, so traditional surge protectors must be replaced annually.
• Myth #5: More expensive products are more effective.  Most people assume that higher priced surge protectors must work better.  However, virtually all retail surge protectors use the same basic MOV components and offer the same level of protection, regardless of cost. 

Thus traditional surge protection products do not necessarily provide effective, reliable protection.  An alternative is a Transient Voltage Surge Suppression (TVSS) system.  Installed at the breaker box, a TVSS unit provides surge protection for the entire building.  Installing a TVSS system offers multiple benefits to both residential and commercial users:

• Long-term protection: Unlike traditional surge protectors, TVSS systems last for years.  The best companies offer warranties of up to 15 years. Installing TVSS units also means less expenditure on yearly surge protector replacements.
• Insurance discounts: Since these systems decrease the monetary impact of electrical surges, many insurance companies offer discounts to businesses and homeowners who install them. 
• Complete protection: Surges can occur from both lightning and other transient sources.  A TVSS protects against all surges, regardless of their source.
• Cost effectiveness: One TVSS protects an entire building, so consumers do not have to purchase a separate surge protector for each electronic device. 

Proper surge protection saves businesses and consumers both time and money.  The best option for comprehensive surge protection is a TVSS system, which protects the entire building directly from the breaker boxes.