Own a Small Business? Tax Credits You can Use

Posted on September 10, 2021

Own a Small Business? Tax Credits You can Use

Tax credit is the sum that is deducted from the amount of tax you need to pay to the government for the year. Small business can gain much by claiming tax credit, as it reduces the amount of taxes and puts more money into their pockets. There are some credits that most small businesses can enjoy the benefits of.

Fox Business discusses disabled access credit and work opportunity tax credit that can be used by small businesses for making improvements in their business and for employing veterans respectively.

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 fulfil 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.

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. The amount you can claim depends upon how much you are paying in wages, how many hours the veteran works for you and how long the veteran was unemployed prior to hiring. You must hire the veteran before the end of 2013 in order to take the credit.”

Along with these tax credits, small businesses may also consider using tax credit that helps them in providing health insurance to their employees. The act, Patient Protection and Affordable Care Act, was passed by Congress in March, 2010. The IRS explains:

“. . . the credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees.

“This credit provides a real boost to eligible small businesses by helping them afford health coverage for their employees,” said IRS Commissioner Doug Shulman. “We urge small businesses and tax-exempt employers to look closely at this important tax break — which is already effective — to see if they qualify.”

The maximum credit is 35 percent of premiums paid in 2010 by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. In 2014, this maximum credit increases to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible employers that are tax-exempt organizations.”

You can take the benefit of these tax credits this year. Apart from saving money on taxes, you can also use additional benefits for your business, yourself and your employees through tax credits this tax year.