Running your own business comes with a wide range of decisions to make. Many of these decisions will be based on costs and savings. Fortunately, there are certain tax incentive programs for employers that can help you to save money in the long run. Though it is possible that these tax incentive programs require certain actions that you may already be doing, you simply may not realize you could be taking advantage of additional savings. Certain tax credits allow you to invest funds elsewhere, such as increasing employee salary and benefits or updating equipment. Here are four tax incentive programs for employers every employer should be aware of:
Employer Social Security and Medicare Taxes
If you are a company that has employees who receive tips, this one’s for you. Certain food and beverage establishments pay Medicare and Social Security taxes on tips that employees receive. As such, your business might be able to claim this as an income tax credit. It will cover the part of the employer’s Medicare taxes and Social Security taxes that you pay. Do not let this tax incentive program pass you by as it can benefit your business and save you money; money that can be used to grow your business.
The IRS explains this as the ‘FICA tip credit’, also called the “45 B Tax Credit”. This is reported to the IRS via IRS form 8846. You can learn more about this tax credit here.
Work Opportunity Tax Credit
There are certain targeted groups that can earn your company a lucrative tax credit under the Work Opportunity Tax Credit (WOTC) program. These targeted groups include:
- SNAP Recipients
- TANF Recipients
- Qualified Veterans
- Designated Community Residents
- Vocational-Rehabilitation Referrals
- Supplemental Security Income (SSI) Recipients
- Summer Youth Hires (ages 16-17)
- Qualified Long-Term Unemployed Recipients
This list includes a fairly large amount of people and you may have already hired someone from these groups, without knowing. The credit amount ranges from $1,500 to $9,600 and depends largely on the target group the individual is certified under as well as the hours worked within their first year of employment.
Energy Tax Incentives
When you make your business more energy-efficient, not only can this help the environment and save you money on your energy bills; it can also qualify you for a tax credit. There are tax incentive programs for making energy-saving improvements as well as buying energy-efficient appliances. Some improvements that can fall under energy tax incentives include:
- Solar water heaters
- Fuel cell equipment
- Solar panels
- Wind turbines
Energy efficiency is constantly changing and it is important to stay up to date with the latest tax incentive programs for employers.
Disabled Access Credit
As equality and access continue to be implemented into our day-to-day lives, many businesses are doing what they can to help. When you have a storefront or public access for customers, you want to make sure everyone can maneuver in and out easily. All business owners also need to think about access and comfort for your employees. Making changes to guarantee accessibility for people with disabilities can make you eligible for the Disabled Access Credit. This is a one-time tax credit for small businesses that incur bills for providing access to disabled persons. You can claim each year that there are expenditures for disabled access.
How Quentelle Can Help Your Business
Tax credits are instrumental tools that can lower your business tax liability. Depending on which tax incentive programs your business qualifies for, you may end up paying very little in taxes at the end of the year. This will help you invest additional funds to grow your business. Quentelle has experience delivering proven tax credit planning. Contact us online or give us a call at 888-565-5515 today.