Someone who runs a business understands the number of expenses one has to look after throughout the year. There are also a whole lot of taxes in addition that businesses have paid. But taxes can be reduced through good planning tactics to save some good money annually. There are tax-credits that small business often tends to ignore or have no idea about but are instead very beneficial if taken advantage of the right way. Prominent accounting –MD explains how these credits help the small businesses against the various tax expenses that a business has to pay instead. Though it is also important to take note that not every business can be granted a tax credit and to qualify for the same one has to manage its books the right way.
Tax credits
Tax credits help in writing off many business expenses, all one has to make sure is to present his business books the right way. A lot of factors are noticed before granting a business tax credit. Event the location of the business, its nature, and industry specifics are considered.
Business tax credits benefits
- Subtract tax directly from the taxable amount
- Receive refund on paid taxes
- Tax credits help in reducing liability for each dollar
- Utilizing the credits and tax deduction for small businesses
- Save every penny to build wealth
Let us consider some tax credits and tax services that help in covering employee and other costs.
Form 8882 – What is the employer child tax credit?
This important credit focuses on helping and providing facilities for employees in childcare. A credit of about 25 percent of the total expense is paid for employee childcare. Also, about 10 percent of the total expenses can be granted for the child care facilities and referral.
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About Form 8941- credit for small employer health insurance premiums
This credit line provides about 50 percent of the credit to your employee’s health insurance premium. But this type of credit is only applicable for two consecutive years.
- Covering healthcare premium of half of the employees.
- At least 25 full-time employees or less.
- Payroll is less than the average amount
Form 6765- credit for increasing research activities
This credit line is for the research companies. So if your business is in research and development then it could be forwarded a credit line of 20 percent on the total research expenses. It can be used wisely for the employer’s social security. Also, income tax of about $ 250,000 can be offset.
Form 8846- credit for employer social security and Medicare taxes paid on certain employee tips
This line of credit is mainly for the social security and medical care taxes. They are considered a part of general business credits.
So now you have this idea that there are a lot of options for saving some good money out of these multiple taxes that you pay annually. The first and foremost is to get ready for tax preparation to accumulate good wealth in long term. It is always important to keep your books updated to take benefit of any of these tax-saving opportunities.
We at MD Bookkeeping Doctor provide all these essential tax services. We have a team of experienced professionals who will give you all the necessary and important information and help you attain the benefits if every qualification gets a tick.
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