Are you a small business owner looking to save on costs? Are you wondering what tax breaks you might be eligible for? Running a small business can be difficult and expensive, especially at the beginning. There are so many things to manage at once and always so much on the go.
Up to 80% of Americans miss out on tax refunds just because they don’t have all the information. If you’re a small business owner, it’s super important that you get all of the information you need before filing your taxes.
Are you wondering where to start? Do you have questions about what a tax credit is? Don’t worry, we’ve got the answers. There are simple steps you can take to see which small business tax credits you qualify for. Every bit back in the bank account is a bonus.
What Are Small Business Tax Credits?
If you’re a business that betters society, specific industries, or employee culture, you might be eligible for a tax credit. For example, if your business has climate change initiatives or centers around improving the lives of others, there may be multiple tax credits you’re qualified for.
Small business tax credits have a one to one dollar gained to dollar taxed ratio. That means that every dollar of tax credit you receive subtracts a full dollar from the amount of tax you were originally supposed to pay. So, if you have $20,000 in small business taxes and you receive a $5,000 tax credit, you only have to pay $15,000 in taxes.
See Which Small Business Tax Credits Apply to Your Business
Providing health insurance to employees is a great way to keep morale up and have a more engaged work environment. If you already provide health insurance to your employees or you are hoping to add this benefit, you might be eligible for a tax credit.
Employee Retention Credit
Due to the impact of COVID-19 on businesses, the government created a tax credit as a part of the CARES Act. The credit is meant to provide an incentive for businesses to keep their workers employed, despite lockdowns or a decrease in sales. That small business tax credit is equal to 50% of the wages that qualify in 2020 and 70% of the wages that qualify in 2021. It can lead to significant credit, but it can also be complicated to calculate.
On rebate.us you can get help calculating the ERC so you can claim the credit without any issues.
Work Opportunity Credit
If you employ workers who are ex-felons, previously unemployed veterans, long-term family assistance recipients, or summer youth employees living in empowerment zones, you may be eligible for this tax credit.
General Business Tax Credit
After adding up all of your different tax credits (i.e., alternative fuel and work opportunity) you can fill out a separate form to apply for the General Business Tax Credit. Make sure you don’t miss this one!
Next Steps: Gather Your Business Info and Ask an Expert to Help
There is no need to do all of these tax calculations on your own! There are reputable online companies that specialize in calculating small business tax credits.
Rather than miss out on these huge savings from credits, talk to an expert on the subject. We know that as a small business owner you’re incredibly busy, but the money you’ll get back is worth your time.