If you own property for your small business, you must maintain it and improve it from time to time. You may count repairs, remodeling, renovations and additions as business expenses. Some of these business-property expenses qualify as deductions in the year you spend the money if you meet Internal Revenue Service guidelines or qualify under the Energy Policy Act.
Improvements for Energy Efficiency
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The Energy Policy Act of 2005 remains in effect as of October 2012, and allows for business-tax deductions for building improvements that conserve energy. Improvements must meet American Society of Heating, Refrigerating and Air Conditioning Engineers standards, which are published online. You receive a deduction of $1.80 per square foot for your business property if you make improvements that reduce heating and cooling costs at least 50 percent.
Section 179 Improvements
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Section 179 of the tax code allows businesses to deduct the full expense of leasehold improvements for non-residential property. The improvements cannot be an enlargement of the building or the addition of elevator or escalator. Before section 179, businesses had to depreciate the cost of improvements over several years. The section 179 deduction allows you to deduct the full cost in the year the expense occurs. You can deduct up to $250,000 worth of expenses, as of October 2012.
Repairs
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Any repair you make to restore your business building to its original condition can be fully deducted in the year the repairs occur. Though you may think of these repairs as improvements, for tax purposes they qualify as necessary repairs to maintain the value of your property.
Additions
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The IRS does not allow you deduct the cost of additions to a building. These must be depreciated over a period of years, according to depreciation tables provided online by the IRS. Publication 946 tells you the number of years for depreciating additions to a building.
