5 Tax Credits for Businesses You Need to Take Advantage Of

Did you know that millions of dollars in tax credits go unclaimed each year?

If you’re a business owner, then it’s likely that you’ve heard about tax credits. As a business owner, you might be missing out on some significant federal tax credits you should be taking advantage of. Most business owners don’t realize that there are a number of tax credits available specifically for them. Year after year, you might be leaving unclaimed tax credits on the table. 

What is a tax credit? A tax credit is an amount of money that the government will subtract from your income taxes if they deem it appropriate. Unlike deductions which reduce your taxable earnings, this type of financial relief directly reduces the amount of money owed in taxes at year-end. 

Are you looking for ways to save money when it comes to taxes? Read this article to learn about tax credits for businesses you need to take advantage of.

Investment Tax Credit

With solar energy becoming more and more popular these days, the Investment Tax Credit, or federal Solar Tax Credit as many call it, can help you deduct a percentage of the installation cost from a solar energy system from your federal taxes by 26%. It’s also an environmentally friendly way to generate power with no amount of its value left unused. As long as you have taxable income, you qualify, so check out the best solar company for more information. Whether it’s a home or business system, there is no cap amount on its value. 

Premium Tax Credit

The Premium Tax Credit is a refundable tax credit and helps people who need financial assistance to be able to afford health insurance. It’s paid directly to your health insurer, lowering the amount you pay out-of-pocket each month. This makes health care more affordable and ensures everyone can access quality coverage. To qualify, you’ll have to meet certain requirements. The amount you qualify for depends on your estimated income and other household information.

Child and Dependent Tax Credit

The Child and Dependent Care Tax Credit is a non-refundable credit that helps to reduce your taxes by claiming either a child or dependent. The amount of this tax credit depends on your adjusted gross income, the number of dependents you claim, and whether or not you can be claimed as someone else’s dependent. It’s designed to reduce the financial burden that comes along with raising children and aims to help working families by giving them additional money in their pockets after filing taxes each year. 

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) is a tax credit for low-income workers helping to reduce any taxes owed. The EITC is designed to boost wages at the bottom end of the income spectrum while encouraging work and reducing poverty by subsidizing working families making under a certain dollar amount. There are various requirements to qualify for this type of federal tax credit.

Employee Retention Tax Credit

It’s always nice to receive a tax break, but it is even better when you can save money on taxes by doing something that benefits your business. The Employee Tax Credit is an attempt to help businesses retain employees during hard economic times and give them incentive to hire new employees as well. The government offers up to $5,000 for companies who want to offer incentives for their employees so they’ll stay put and not go elsewhere. 

Know About Tax Credits for Businesses

Your taxes are not something you should take lightly. Owning a business is stressful enough, so it’s important to know about the many tax credits for businesses available. With so many different tax credits for businesses out there, it’s important to know which ones can save you money and time so that your return is maximized and you pay as little in taxes as possible.  

Federal tax credits for businesses are an excellent way to save on taxes and help your business grow. Did you find this article helpful? If so, be sure to check out our blog.