As a business owner, you understandably want to take advantage of all of the opportunities for growth and development that are available to your company. Whether you are just starting a home-based business or are trying to take your established company to the next level, it is important for you to understand all of the opportunities available to you. One of the most significant opportunities available to many companies relates to tax incentives, and these can be used effectively to help you grow your business considerably. There are numerous incentives and credits available, and taking time to learn more about these opportunities may be financially beneficial to you.
Federal Tax Credits
Through the Internal Revenue Service, you may learn more about a number of federal tax credits that your company may qualify for. More than a dozen tax credits are available currently, and these tax credits change periodically. Your business may qualify for some right now, or you may be able to strategically take advantage of some of them with the right business decisions. For example, there are tax credits for alternative motor vehicles, employer-provided childcare facilities, new markets and more.
By taking time to learn more about the different credits available, you may be able to put these credits to work for your company. “These credits help offset your costs as they can lower your effective tax rate,” explains ADP tax credit services. In addition, because these credits change periodically, it is important to keep tabs on the incentives that are available for future growth and development benefits.
Work Opportunity Tax Credit
According to the Department of Labor, “WOTC is a Federal tax credit available to employers who hire and retain veterans and individuals from other target groups with significant barriers to employment.” This could include veterans or welfare recipients. The WOTC expired at the end of 2013, but maintaining hiring practices that would qualify is smart in case similar tax credits are passed.
Small Business Health Care Tax Credit
The Affordable Care Act gives tax credits to small businesses that provide health insurance for their employees. The Small Business Administration provides the form and necessary information to utilize this credit. You must have fewer than 25 “full-time equivalent employees.” Additionally, you must pay below $50,000 in annual wages and contribute 50% or more of your employees’ individual premiums. If you meet these requirements, the tax credit is definitely worth investigating.
Local Tax Incentives
In addition to federal tax incentives, there are also numerous local tax incentives that you may qualify for. These may be available through the state and local governments, and often are in place to encourage businesses to establish a presence in the area or to help them grow. These can vary considerably from location to location, and they also may change from year to year. It is important for business owners to contact the business development or revenue department in their state or municipality to understand more about the incentives available. In addition, those who are thinking about expanding should explore the incentives in different markets they are thinking about establishing a presence in.
With federal, state and local tax incentives and credits available to business owners, many business owners will benefit financially from these opportunities. In fact, they can provide business owners with considerable savings that ultimately could help them to expand, introduce new products to their line-up and more.
Author: Kara Masterson is a freelance from West Jordan, Utah. She graduated from the University of Utah and enjoys writing about business and finance and spending time with her dog, Max. If you are interested in how to take advantage of tax incentives in your area visit ADP electronic invoicing services.
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