Tax Credits and Their Importance
Did you know your company might be eligible for tax credits? Tax credits, both State and Federal, are designed to encourage business growth, yet due to limited resources they aren’t marketed to anything but the top 1% of businesses. The burden, then, rests on the business owner to find out which credits his company is eligible for. Nationwide, less than 10% of Companies capture every tax credit opportunity.
Tax credits come from business activity, no matter your industry. If, in the last year, you hired or trained new employees, moved office locations, developed a product or software package, or expanded your business, then chances are you can take advantage of a tax credit.
To help explain the types of credits and the best way of claiming them, we’ve compiled the following information for you.
Federal Tax Credits
The Federal government provides the most overlooked tax credits by small businesses: Work Opportunity Tax Credit (WOTC).
This tax credit is available to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment such as veterans, recipients of government assistance like food stamps, long-term welfare, and unemployment benefits, etc. This is one of dozens of Federal Tax Credit Opportunities.
State Tax Credits
Naturally, state-level credits will vary. Thankfully, the internet makes this search extremely simple. A Google search for something like “(State Name) tax credits” will produce the official government resources you need.
As an example, the search above directed at the state of Georgia listed a web page about tax credits located at Georgia.org.
Georgia has tax credits to increase manufacturing, hiring, training, and even attract Hollywood studios to film movies here! Did you know that Atlanta is now being called the Hollywood of the South?
Based on the information above, you’ve probably determined that you may be qualified for tax credits. The compliance, documentation requirements, and expertise needed to capture tax credits is a significant barrier to entry, preventing most business owners from feeling they can get a handle on the issue. Thankfully, you don’t have to. Just as CPAs dedicated themselves to finding deductions, so to do Tax Credit Professionals focus on state and federal credits you can claim.
We’ve partnered with McMillian & Associates, a leading expert in comprehensive State and Federal Tax Credits for companies around the country. We recently hosted them for an educational webinar Tax Credits and Their Importance where great information was shared about tax credits and how to capture and maximize the benefits.