Posted by Frankye at On Time Supplies | Posted in Maximizing Profits | Posted on January 27, 2012
Our number one tax saving tip is to know your tax credits. Generally speaking, small business tax credits fall into three categories: credits for going green, credits for hiring employees, and credits for non-wage forms of employee compensation, such as insurance and childcare assistance. Basically, the government wants to reward businesses that invest in their employees and communities.
Top 5 Small Business Tax Credits
1. New Hire Tax Credit
If you hired an employee between February 3, 2010, and January 1, 2011, and kept them on for at least a year, you probably qualify for the New Hire Retention Tax Credit. Use form 5884-B to claim this small business tax credit.
2. Employee Health Insurance Tax Credit
Cover at least half of your employees’ health insurance costs? The government will offset up to 35% of your costs with a tax credit for small employer health insurance premiums. Fill out IRS Form 8491 to claim this small business tax credit.
3. Eco-Friendly Vehicle Tax Credit
The Alternative Motor Vehicle Tax Credit rewards business that add certain environmentally-friendly vehicles to their fleet. There’s are also small business tax credits for the fueling costs of such vehicles. Use IRS Forms 8910 8911 and 8864 to claim your green credits.
4. Active-Duty Employee Tax Credit
If you’ve got an employee on active duty in the military, Uncle Sam thanks you with the Credit for Employer Differential Wage Payments. Just fill out IRS form 8932 to claim this small business tax credit.
5. Community-Oriented Investment Tax Credit
The government also offers small business tax credits for community investments. The New Markets Tax Credit rewards equity investments made in qualified community development entities. Fill out IRS Form 8874 to see if your investment qualifies.
See all the small business tax credits you can use to cut your tax bill at the IRS website.