Energy

Article Dean Dorton

Bill Kohm, Director of Assurance Services, was appointed to serve on the Reclamation Guaranty Fund Commission for the Commonwealth of Kentucky by Governor Matt Bevin.

Bill will represent certified public accountants, serving a term expiring July 1, 2020. He is replacing Sharon P. Warriner of Barbourville, whose term has expired.

Bill has more than 20 years of experience in public accounting, specializing in audit and accounting services in the natural resources industry. He leads Dean Dorton’s Energy & Natural Resources Team which consists of approximately 15 professionals. A substantial portion of Bill’s professional career has focused on coal mining clients with a focus on internal and external audits. Due to his extensive experience, he has been utilized as an expert witness on several coal matters. He has also conducted internal and external coal accounting/auditing trainings over the years.

Bill has spoken at local, regional and national events focused on accounting and auditing matters. The presentations have focused on the coal industry and general accounting updates.

Some of his present and past professional activities include:

  • American Institute of Certified Public Accountants
  • Kentucky Society of Certified Public Accountants, Natural Resources Planning Committee Chair
  • Kentucky Coal Association, Firm Representative
  • Kentucky Oil and Gas Association
  • The Institute of Internal Auditors, Member
  • National Society of Accountants for Cooperatives

Dean Dorton has had the privilege of working with a wide variety of coal companies for many years. We understand the coal industry’s unique issues and have developed accounting and audit plans, tax services, and consulting processes to address them. We know what specific skills are needed to serve coal clients. Many of our coal clients are of significant size and complexity.

View Bill Kohm’s Bio

Article Dean Dorton

The income tax credit for certain energy-efficient home improvements and equipment purchases was extended through 2016 by the Protecting Americans from Tax Hikes Act of 2015 (the PATH Act). So, you still have time to save both energy and taxes by making these eco-friendly investments.

What qualifies

The credit is for expenses related to your principal residence. It equals 10% of certain qualified improvement expenses plus 100% of certain other qualified equipment expenses, subject to a maximum overall credit of $500, which is reduced by any credits claimed in earlier years. (Because of this reduction, many people who previously claimed the credit will be ineligible for any further credits in 2016.)

Examples of improvement investments potentially eligible for the 10% of expense credit include:

  • Insulation systems that reduce heat loss or gain,
  • Metal and asphalt roofs with heat-reduction components that meet Energy Star requirements, and
  • Exterior windows (including skylights) and doors that meet Energy Star requirements. These expenditures are subject to a separate $200 credit cap.

Examples of equipment investments potentially eligible for the 100% of expense credit include:

  • Qualified central air conditioners; electric heat pumps; electric heat pump water heaters; water heaters that run on natural gas, propane, or oil; and biomass fuel stoves used for heating or hot water, which are subject to a separate $300 credit cap.
  • Qualified furnaces and hot water boilers that run on natural gas, propane or oil, which are subject to a separate $150 credit cap.
  • Qualified main air circulating fans used in natural gas, propane and oil furnaces, which are subject to a separate $50 credit cap.

Manufacturer certifications required

When claiming the credit, you must keep with your tax records a certification from the manufacturer that the product qualifies. The certification may be found on the product packaging or the manufacturer’s website. Additional rules and limits apply. For more information about these and other green tax breaks for individuals, contact us.

Article Dean Dorton

The Energy Policy Act of 2005 was enacted to provide immediate tax savings opportunities for energy efficient improvements. For commercial buildings, the Energy Policy Act of 2005 allows for a tax deduction of up to $1.80 per square foot for energy-efficient features of the building’s construction or retrofit under IRC §179D. Commercial buildings also include multi-family residential buildings with more than three stories. For instances where a non-taxpaying entity, such as the government or a municipality owns the building, the Energy Policy Act of 2005 allows for the primary designer, typically the architects and engineers, to claim the deductions. If the market downturn is a factor in current year profitability, this may still be beneficial due to the ability for certain small businesses to carry back net operating losses up to five years, thus, creating immediate cash benefits.

To claim a tax deduction under the Energy Policy Act of 2005, there are three different areas that qualify for a tax deduction of up to $.60 per square foot for each area:

  • Interior lighting systems
  • HVAC
  • Building envelope, e.g. the perimeter of the building including the roof, walls, windows, doors and floor/foundation

The deductions apply to buildings or systems placed in service or remodeled during calendar years 2006-2016. To qualify for those deductions, a project – whether an entire building or one of the three subsystems – must cut energy use compared to the limits specified in ASHRAE 90.1-2001.

Of the three areas available for these tax incentives, the one that is drawing the most attention is interior lighting systems. With substantial improvements in recent lighting product efficiency, most products currently available meet the requirements of the Energy Policy Act of 2005. The incentive for lighting systems can also be taken advantage of without energy modeling, which is required by the two other areas. Owners of commercial buildings have the opportunity to take advantage of the combination of savings from the energy efficient lighting and the savings from the tax incentives available. To demonstrate the economic benefit of a commercial building that qualifies for the maximum deduction for lighting systems, a 100,000 square foot building will generate an immediate federal tax deduction of $60,000 and in most states an additional $60,000 state deduction.

In order to qualify for these deductions for commercial buildings, a certification must be obtained by an engineer or contractor that is properly licensed as a professional engineer or contractor in the jurisdiction in which the building is located. Dean Dorton has the resources available to provide you with this certification and walk you through the cost/benefit analysis of taking advantage of these tax incentives.