Cash flow is crucial to the success of any size firm. Make the most of these ten small business tax benefits to reduce your tax bill and increase your company’s bottom line.
1. Standard credit for businesses
This is not a single credit but rather a compilation of twenty-five separate tax credits that are all reported on Form 3800 to the Internal Revenue Service.
2. Tax breaks for small businesses that offer health insurance
To encourage small enterprises to cover their full-time employees’ medical costs, a tax credit has been established. but there are conditions connected.
3. A deduction for small businesses that have just started a pension plan
The government may reimburse up to $500 of your company’s retirement plan setup and employee education expenses.
4. Tax deduction for employer-offered child care
There is a credit available of up to 25% if you contribute to your employee’s childcare expenditures.
5. Credit for people with disabilities
You can get a tax credit of up to $5,000 if you spend up to half of that amount making your small business more accessible to people with disabilities.
6. The work opportunity tax credit
Employers can get a tax credit of up to $9,600 if they hire someone who the IRS classifies as having “consistently faced severe impediments to employment.”
7. Refund of employer medicare and social security taxes paid on selected employee tips
For employers, the FICA tip credit is a way to recoup some of the FICA taxes that they forked over to cover their workers’ gratuities.
8. New credit for vehicles with plug-in electric drive systems
There is a potential $7,500 tax credit for small businesses that purchase new electric vehicles.
9. Rewards for keeping good workers
When circumstances are tough, such as during the recent COVID-19 outbreak, this credit helps small businesses afford to keep their entire staff on the payroll.
10. Accumulating credits towards paid sick and family time
The Families First Coronavirus Response Act (FFCRA) mandated additional time off for small and medium-sized businesses, and this tax credit can be utilized to help defray those costs.
There is help available if navigating these tax credits seems overwhelming. You can reach out to https://stentam.com/ for assistance.
