Owning a small business can be a hard job, especially in the beginning. A number of small business fail within the first five years (although that number is getting smaller), but we believe part of the reason is that they aren’t taking advantage of every opportunity to survive and grow.
One way you can do that is through tax credits. There are multiple tax credits available to small businesses that many owners just aren’t aware of.
Here are some tax credits every small business should know about:
- Alternative Motor Vehicle Credit – A credit of up to $8,000 to encourage the purchase of an alternative fuel source vehicle.
- Disabled Access Credit – A credit for businesses that have expenses related to providing access to people with disabilities. A maximum $5,000 credit for $10,000 of expenditures is available.
- Employer-Provided Child Care Credit – A credit for businesses who directly pay the child care expenses for its employees. The credit is for 25% of expenses up to $150,000 a year.
- Rehabilitation, Energy and Reforestation Investments Credit – Credits for investments in reforestation, building rehabilitation and alternative energy property used in business. The credit is generally 10% of expenditures and is limited to $10,000 per year
- Qualified Research Expenses Credit – A credit to encourage domestic research and development. The calculation of the credit can be very complex, but can also provide substantial tax savings.
- Small Employer Pension Plan Startup Costs Credit – A credit for small businesses to offset the costs of starting a pension. The credit is limited to $500.
- Work Opportunity and Welfare-to-Work Expenses Credit – Credits available to businesses that hire employees who have traditionally faced significant barriers to employment. The credits are calculated based on wages paid to the employees and can provide up to a $9,000 savings over two years.
There are a number of other tax credits available, and beyond that, there are potential tax deductions. Know what you are eligible for and take advantage of every opportunity provided to your business. Have a strategy and plan to make the most out of these opportunities. These tax credits can help your business thrive. JuJu Smith-Schuster Jersey