In business, every single dollar counts. This is why many entrepreneurs are very particular about their spending habits when it comes to what can be written off and what cannot be written off and what we can use when it comes to taxes. Most small businesses don’t realize that there are top debt consolidation loans for poor credit available, and that they can deduct the interest if it’s a secured asset.
When it comes to small-business owners, there are specific tax credits that are only avail to this class of business, and today we will be covering a few of these tax credits. Let’s get started!
Five Small Business Credits that are Worth the Knowing
1. Small Business Health Credit
Small Business Health Credit is given to small businesses that pay health insurance premiums on behalf of its employees. Usually, health premiums are paid by employees themselves, and employers just give their share, or pay at least a certain percentage as their contribution.
In some cases, health insurance is given by employers to their employees in full. This means employees do not pay any amount, but instead, it’s the employers who pay all such premiums. As a reward, these employers are offered a tax credit of 50% of the total health insurance cost.
2. Research Credit
Some businesses are involved in research and development. As an entrepreneur who owns a small business, you may think that this tax credit is only exclusive to big companies with R&D department. Actually, you don’t have to have an elaborate R&D department to be eligible with this tax credit.
Small businesses that are able to develop new products and processes that are beneficial to many people are eligible for this credit. Moreover, such innovations don’t have to be complex. In fact, even a new patent is considered part of research and development.
3. Disabled Access Credit
Disabled Access Credit is given to employers who make their premises accessible to people with disabilities based on ADA or the Americans with Disabilities Act. Take note that this tax credit is offered to small businesses with gross receipts of $1 million or less for the previous tax year. If your business had gross receipts that exceeded $1 million, you can still be eligible provided that you have not been able to hire more than 30 full-time employees for the previous tax year.
If you are eligible for this tax credit, you are entitled for 50 percent of the first $10,000 of qualified expenses, so the maximum credit is $5,000.
4. Employer-Provided Child Care Credit
The childcare credit is commonly given to individuals who work while paying for childcare services. This is designed to reimburse a certain percentage of the cost they incur.
Employers, on the other hand, can also be qualified for a similar tax credit when they are able to provide childcare services for the families of their employees.
5. Alternative Motor Vehicle Credit
To encourage business owners to purchase vehicles that use alternative-fuel source, the government has designed a tax credit that will make it possible. This will reward small-business owners with a tax credit up to $8,000. However, hybrid cars are excluded from the list of qualified vehicles.
Tax credits are given in specific circumstances when it comes to our small business taxes and there tends to be a variety of tax credits that most small-business owners don’t even know about. We hope that you can use some of the tax credits for your business in order for you to save the most when it comes to your taxes.