Blogs

Help Your Clients by Mentioning These Four Tax Credits

  

Small businesses across America have access to some of the best tax break opportunities in the country. It’s part of the capitalist mindset that seeks to reward entrepreneurial pursuits. However, most business owners are so focused on their businesses that they have little time to think about applying for, or claiming, tax credits that are their due. As their accountant or financial advisor, it’s critical that you guide them in the right direction.

Don’t Forget These Tax Credits

While this is by no means an exhaustive list of frequently forgotten tax credits, it does contain a handful of the top ones. Next time you meet with your clients, keep these in mind:

1.   Small Business Health Care Tax Credit

One of the more confusing tax credits for businesses to understand is the Small Business Health Care Tax Credit. Here’s what the IRS says about it (as you know, changes were made starting in 2014):

  • The maximum credit is 50 percent of premiums paid for small business employers, and 35 percent for small tax-exempt employers.
  • In order to be eligible, small business employers must pay the premiums on behalf of the employees (on a plan offered through the SHOP Marketplace).
  • The credit is available to qualified employers for two consecutive years.

In addition to explaining the details to your clients, direct them to this page where they can read about using Form 8941 to calculate the credit and learn about deductions.

2.   Solar Tax Credits

For most companies, energy is one of the biggest overhead expenses on the balance sheet. Thankfully, however, there are ways to reduce your dependence on expensive energy. Many are turning to solar power, and there’s never been a better time. There’s ample opportunity for businesses to install solar systems at discounted prices. According to TurboTax, you can claim 30 percent of the cost as a tax credit if you install an Energy Star approved system by the end of 2016.

In order to claim the credit, the business must file IRS Form 5695 as part of the tax return. The form allows them to calculate the credit, which is then entered on the filed 1040. While it costs a lot to install solar panels on the front end, businesses can expect to save a few hundred dollars each year thereafter. Most businesses hit a break-even point in five to ten years.

3.   Research Credit

If you have clients who spend a lot of time researching, they may be able to recoup some expenses with a research credit. This credit was revived in late 2014 and can equal as much as 20 percent of qualified research expenses (after exceeding a base amount). If businesses don’t want to worry about meticulous calculations, they may elect to use a credit that’s based on 14 percent of the amount by which expenses exceed 50 percent of the previous three years’ average.

4.   Disabled Access Credit

One simple credit that businesses can apply for is the Disabled Tax Credit, which “provides a non-refundable credit for small businesses that incur expenditures for the purpose of providing access to persons with disabilities.” This credit is available to small businesses that earn $1 million or less and have 30 or fewer employees. You should refer to Form 8826, Disabled Access Credit for additional information on eligible expenditures.

Speak With Your Clients Today

Do you think that any of your clients would be interested in, or would qualify for, these credits or breaks? It’s worth looking into. Not only could you save your clients thousands of dollars, but your knack for finding tax breaks could also earn you some extra business along the way.


0 comments
73 views
Return to Blog List

Featured Blogs

Log in to see this information

Either the content you're seeking doesn't exist or it requires proper authentication before viewing.

Permalink