Tax Credits To Reduce Business Taxes In 2019
Most companies understand that the term,“tax credit” refers to something beneficial, but this doesn’t always translate into them comprehending what it signifies. It can even lead to the term being used interchangeably with tax deductions. This is incorrect because as you will discover as you read through this list, tax credits are definitely better than deductions.
Tax credits are given to companies and individuals to incentivize them to implement certain activities. Your business must have bought or started using the equipment, facility, or vehicles within the year for which you wish to claim the tax credit. All of the credits are attached to related qualifications or limitations. It is important that you understand what these are before submitting the claim.
Family Leave Act Tax Credits
2017 brought us the Tax Cuts and Jobs Act. This includes a new form of tax credit meant to incentivize small businesses into offering paid leave to all their employees. In order to receive this tax credit, a business must activate a policy that gives a minimum of two weeks of family leave on a full salary. There are stipulations as to which employees will qualify for this. It must be in addition to sick leave (not absenteeism), vacations, and holidays.
Going Green Tax Credits
Purchasing equipment to make your business run more energy efficiently qualifies you for a tax credit. Anything that can make your company run on a more environmentally-friendly basis applies. In addition to these tax credits, your business may be eligible for tax deductions as well. Any energy saving devices or activities such as wind power, fuel cells, and solar panels qualify you for Business Energy Tax Investment Credit.
Research And Development Tax Credit
Any authority Research & Development Tax Credit firm will explain to you that even small businesses can qualify for this kind of tax credit. Even if your firm doesn’t do traditional scientific or cutting edge research, other forms of development can make you eligible for the tax credit. If you have invested money into product development, business performance improvements, product function, quality, and reliability improvements, or payments to researchers outside of your company, then you can get a tax credit for the amount spent.
Disabilities Access Tax Credit
Paying for your business premises to become more accessible for anyone with disabilities may qualify you for tax credits. Anything that enables an employee or visitor more comfortable such as barrier rails, toilet, and shower rails and smooth inclined ramps will serve the dual purpose of making life better for the disabled individual and decrease your tax for that year.
Hybrid Vehicle Tax Credit
If your company makes a move to hybrid or alternative vehicle use, you will be eligible for Alternative Motor Vehicle Tax Credit for that year.
Tax Credit is adapting all the time to reflect changes in attitudes and priorities. Discuss any tax credit queries you may have about your business with your tax professional near you. It’s worth it when tax year comes around.