Business incentives and tax credits aren’t for everyone. However, before deciding they aren’t for you, consider some of the mistaken assumptions I’ve heard from small business owners.
1. Business incentives don’t apply to me
It’s understandable that many business owners think this. The media often highlights incentives awarded to influence large companies to move to (or remain in) a specific geographic location. These incentives are usually based on job growth or retention along with significant capital investment – and they won’t apply to the small business that isn’t growing quickly or considering moving.
But there are incentive opportunities for small businesses – such as training grants for businesses wanting to train their current employees, hiring tax credits for employing a veteran or someone who has a barrier to entry into the workforce, or even the R&D credit, which isn’t just available for companies with employees in white lab coats and beakers.
2. My accountant is taking care of it
Good accountants do make sure you are benefiting from tax incentives for business. But they may only calculate the credits that are easy to capture and well-known (think of the FICA Tip Credit in the restaurant industry). They are focused on gathering information to close the books, timely filing your tax return, or determining your sales tax liability. Unfortunately, these important activities may not leave them time to become knowledgeable about the incentives available for your business or the process it takes to capture the benefit.
3. It takes too much work and is too costly
It’s true, some business tax credits and incentives do take a lot of work. Many incentives require applications and follow-up reporting. There is often documentation involved, whether filed with the IRS or state tax departments, or retained by the company in case of an audit. There’s also the actual calculation of the benefit or grant reimbursement requests.
However, the benefits to be gained from business tax credits and incentives can be significant. And regarding cost – you can often request the work to be done on a contingent fee basis so there is no cost to you until a benefit is captured. Even a short conversation with an expert in this field should tell you if there might be opportunities for your company.
For more information, such as business tax credits and incentives that you may be able to leverage, contact Terracina Maxwell by emailing firstname.lastname@example.org or by calling 614-545-9100 x19. Or, visit our website to learn more about our corporate tax services.