As a small business owner, you likely dread the end of the year. Why? Well now is the time to begin generating financial reports so that you can be prepared for tax season. With all the local and federal laws pertaining to taxes for small business owners, it can often be enough to make you scream. Be that as it may, there are opportunities for businesses to take advantage of the tax season and look for ways to save money instead of forking it over to the government.


Tax Credits and Incentives

When you think of taxes, you think about the amount of money you’re going to lose. However, the government understands the financial burden of running a business and will often give you credits for implementing certain concepts into your company. Simply put, tax credits are a better version of a deduction. While a deduction can lower your taxable income by a certain percentage, tax credits can actually save you money by cutting your tax bill dollar for dollar, as outlined in this article about ADP business tax credits and incentives.

The trick is to learn how to capitalize on these credits and incentives every year so that you save your business money. Below are just a few credits and incentives you should be aware of:

1.  Alternative Auto Fuel Source

Do you happen to have company vehicles that operate on hydrogen fuel-cell technology like the Honda FCX Clarity? If so, you could be due for an income tax credit. Businesses who purchase alternative fuel sources for their company vehicles can receive up to $8,000 for their investment. Though the Honda FCX is the only car recognized by the IRS, keeping a close eye on other vehicles using alternate fuel choices could save you money in the future.

2.  Disabled Access Credit

If you have invested money to ensure that those with disabilities can easily enter your place of business you could receive a credit for it. For a $10,000 investment towards accessibility, you could receive as much as $5,000 worth of credit on your business taxes.

3.  Employer Provided Childcare Credits

There are some employers that pay a percentage of their employee’s childcare bill. If this happens to be an incentive that you offer your staff, you could receive a sizable credit. Spending as much as $150,000 could result in a 25% credit on your expenditures. In fact, the employer provided child care tax credit is likely to be more than the child and dependent care credit you receive on your personal tax returns.

4.  Energy, Rehabilitation, and Reforestation Investments

If your small business currently invests in the rehabilitation of businesses, alternative energy solutions, and reforestation, they can earn a 10% credit on their total costs. The maximum credit per year is $10,000 but who couldn’t use that sort of cash?

5.  Pension Plan Startup Costs

If you’ve invested in creating a pension or retirement plan for your staff, you may be eligible to receive a credit for it. Any small business who invests in the startup of a pension program can receive $500 in credits on their return.

6.  Welfare to Work Credits

If you’re hiring new staff, you may want to consider hiring employees who might have a hard time finding employment. As many job seekers deal with barriers that prevent them from obtaining employment, employers willing to “take the risk” so to speak are given a credit. Those barriers might include individuals who can’t afford childcare, have certain disabilities, lack certain education, or have criminal histories. While some barriers are easier to overcome than others, if you’re willing to hire individuals with these barriers you won’t be disappointed. The credit is determined based on the salary you pay the employees. However, it can total as much as $9,000 in credits and savings.

Of all the mistakes you’ll make as a small business owner, don’t let the opportunity to miss money pass you by. Though course tax credits is only one option you have for saving money during the tax season it is a very beneficial avenue to consider. When implementing your tax plan, be sure to consult with a certified accounting professional to determine where you can save money and how you can implement changes in the New Year to receive the maximum amount of credits for your business.