Running a business costs money…lots of it. If you’re looking for a way to reduce those costs, you could find them in tax reductions. Governments reward small businesses with tax credits for activities like fighting climate change, improving the economy, and enhancing the lives of employees (through things like providing benefits). Here are some business tax credits you need to know about so that you can use for your small business.
1. General Business Tax Credit
This business tax credit is a catchall that comprises various tax credits that are meant to encourage business owners to take on certain activities. It covers anything from buying electric vehicles to retaining employees, getting into new markets or employer-provided childcare. Individual credits are tallied up on separate forms, under their individual set of rules. The resulting total of all forms determines the overall credit.
2. Family Leave Act
The Family Leave tax credit was included in the 2017 Tax Cuts and Jobs Act as an incentive to offer paid leave for employees. To get this credit your business must offer 2 weeks of paid family leave to those employees who qualify. This family leave is in addition to any vacation time, paid time off, or sick leave. This credit is offered for the 2018 and 2019 tax years.
3. Alternative Fuel
These tax credits are calculated from the costs of alcohol-based fuel production, such as ethanol, and alternative fuels like renewable diesel. The reasoning behind this credit is to encourage businesses to invest in fuels that reduce our dependence on imported oil. However, these credits only apply if you’ve been involved in the production of these fuels, not just the consumption.
4. Disabled Access
If you’ve made changes to your business in order to accommodate those with disabilities (like installing access ramps, upgrading bathrooms or providing braille text) you’re eligible for disabled access tax credits. You’re eligible for this tax credit if your business makes no more than one million dollars annually and employs fewer than 30 employees.
5. Research and Development
have actually been available for a number of years, but many businesses don’t know they can qualify. Your business doesn’t need to do scientific research to qualify for these credits. You can qualify if you do other sorts of research. For example, product development, improving product reliability and functionality and improving business performance all count toward this tax credit.
6. Work Opportunity Tax Credit
The work opportunity tax credit provides credits for small businesses that hire employees in categories including unemployed veterans, food stamp recipients, long-term unemployment recipients and more.
Business Tax Credits for Your Company
While these business tax credits can prove beneficial for your company, it’s not a one time deal. These credits will need to be reviewed every year since your business’s eligibility can change. Get more helpful tips for your business by exploring the rest of our blog site.