Tax Credit Every Small Business Owner Should Know About
When it comes to running your small business, money is often tight, especially when first starting the business out. You might not make a profit for the first few years due to all the loans and equipment you pay off, but if you stay with it and have an excellent idea, you stand a good chance at eventually running a successful company. In order to improve your financial foothold though, you can take advantage of a few different tax credits available to you. This way, you can at least trim away at the amount of money you have to pay Uncle Sam, and maybe even increase how much of a return you receive from the government.
Alternative Motor Vehicle Credit
If you are looking to purchase a new vehicle for your company, consider going with a vehicle that uses an alternative fuel source. An electric vehicle is an excellent way to save money both at the pump and when filing taxes. This is because the federal government provides up to $8,000 in tax credits for you and your business. Additionally, depending on where your company is located, you can actually add onto this through state incentives as well.
Disabled Access Credit
If you own a store front, you might have found the need to install equipment to help disabled individuals enter your building. Whether this is a handicap bathroom or a ramp to the building, you are able to take a maximum credit of up to $10,000. This can significantly cut down on the amount of money you have to pay in when it comes to tax season.
Employer Child Care Services
Providing child care services for your employees is an excellent service that can attract desirable employees who are also family oriented. Typically, a family oriented employee who is rooted in the area is not going to leave your company on a whim and they generally put in an exceptional amount of work. In order to attract these kinds of employees to your business, you need to offer certain perks, including employer child care services. This does not mean you need to swallow the entire expense though. You receive a credit for the expense for 25 percent of the entire bill, all the way up to $150,000 annually.
There are certain forms of research you can receive tax credits for. While this is a bit more specific, if your business falls in line with developing prototypes, certification testing, developing new technologies, improving software technologies and improving internal processes, you are in line for a tax credit, although the exact percentage is going to vary. Make sure to check with your accountant to see if you qualify for this specific tax credit.
Small Business Pension Plan
Starting up a pension plan for your employees is one of the best ways you can bring about top talent. It is also rather expensive as well. If you are looking to start a pension fund, you can claim a tax credit of up to $500.
Welfare to Work
Individuals on welfare are often on welfare for a disability or some other reason that makes it difficult for them to work. While not working, these individuals can become a rather large burden on the American government. However, should you hire these individuals, the government is going to provide you with a tax incentive. You are able to obtain up to $9,000 over two years for hiring welfare to work individuals.