Small Business Tax Credits You Need To Know About
Small business owners should be aware of tax credits that could reduce their tax liability. There are many tax credits available. Some are applicable only for certain types of businesses. Check out which tax credit enumerated by Bonnie Lee in an article published at FoxBusiness.com that you can use to lessen your tax liability. Credits could be claimed when you have a benefit retirement plan. If your sales is less than a million dollars or you have less than 30 employees, you can claim 50% of your expenses up to a maximum of $5,000 if you implement disabled access on your business premises. Read more of these often-overlooked tax credits.
1. Credit for retirement plan startup expenses. If you implement a defined benefit plan including a 401(k), SIMPLE, or SEP, you may take a credit of up to $500 for startup expenses. Claim your credit on Form 8881.
2. Disabled access credit. If your sales for the prior year were less than $1 million or you had fewer than 30 employees, you may take a tax credit for improvements made to your business property to fulfill the requirements of the Americans for Disability Act. Roughly, you will enjoy a tax credit of 50% of your expenditures up to a maximum credit of $5,000.
3. Work opportunity tax credit. This credit was extended another year thanks to the Family and Business Tax Cut Certainty Act. If you hire veterans you may qualify you to receive up to $9,600 in the form of a tax credit and up to $6,240 if your organization is a nonprofit agency. You must hire the veteran before the end of 2013 in order to take the credit.
4. Fuel and alternative motor vehicle credits. There are a plethora of tax credits for manufacturing of fuels or greening up your business’ transportation expenses. Biodiesel, renewable diesel, low sulfur diesel, alcohol and cellulosic biofuel fuels, among others. Check with your tax pro to determine if you qualify.
5. Small employer health insurance premiums. If you have fewer than 25 employees, and paid average annual wages of less than $50,000 you may qualify for this credit. Check with your tax pro to determine if you do or not.
6. Empowerment Zone credit. This one was also extended thanks to the Family and Business Tax Cut Certainty Act. If your business resides in an empowerment zone, you may claim the credit. See IRS Form 8844 to find out if you qualify.
7. Credit for employer Social Security and Medicare taxes. If you own a beverage or food service establishment where tipping is customary, you may receive credit for the amount of Social Security and Medicare taxes you paid on employee tips reported to you. Check out form 8846 …
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