4 Tax Breaks Small Businesses Usually Miss
Don’t Miss Out on These Small Business Tax Credits
Taking advantage of tax breaks is a great way for small businesses to keep more of their profits. However, because the tax laws change frequently and can be quite confusing, many small business owners miss out on some of these opportunities.
Check out this list of four tax breaks for small businesses. How many of them have you claimed?
Work opportunity credit: If you hire employees from groups such as veterans, ex-felons, high-risk youth, summer youth employees or an individual with a mental or physical disability, you may be able to claim a percentage of that employee’s qualified wages. Employers generally can earn a tax credit equal to 25% or 40% of a new employee’s first-year wages, up to the maximum for the target group to which the employee belongs. Employers will earn 25% if the employee works at least 120 hours and 40% if the employee works at least 400 hours.
Disabled access credit: If you update your business facilities to accommodate disabled employees, you may be able to make a claim. The IRS limits the credit to 50 percent of the amount of the eligible expenditures between $250 and $10,250. This means that it could yield a credit of as much as $5,000 per current guidelines.
Small business health care tax credit: The small business health care tax credit benefits employers who:
- have fewer than 25 full-time equivalent employees
- pay an average wage of less than $51,600 a year
- pay at least half of employee health insurance premiums
The credit percentage is 50 percent of employer-paid premiums; for tax-exempt employers, the percentage is 35 percent.
Retirement plan credit: You may be able to claim a tax credit for some of the ordinary and necessary costs of starting a SEP, SIMPLE IRA or qualified plan. The credit is 50% of your ordinary and necessary eligible startup costs up to a maximum of $500 per year.
If you want to find out which tax breaks you might be missing, call the experts at Next Level Accounting & Tax for an evaluation. We can help you save money at tax time and throughout the year with tax planning and business services. Contact us today to learn more.