Whether you are just starting your small business in Lancaster or have been in business for a while, it is important to know about potential tax credits that might be available to you.
Feeling anxious or stressed during tax season is normal, but knowing you are using the available small business tax credits to your advantage can help you save money, allowing your business to grow.
How tax credits can help you
Tas credits are different from tax deductions and can offer your more benefits. While you should still take advantage of tax deductions, tax credits directly decrease the tax you owe on a dollar-for-dollar basis.
There are several different types of small business tax credits. Many of the tax credits depend on what you offer your employees.
Health insurance and leave credits
You could receive a tax credit for offering your employees benefits such as health insurance and paid family and medical leave. There are various requirements you must meet to qualify.
For example, to receive the health insurance credit, some of the requirements include having less than 25 full-time employees and paying annual wages less than an average of $56,000 per full-time employee.
Research and development credit
You could also qualify for a research and development credit. The intent of this credit is to encourage small businesses to engage in creative endeavors such as developing new or unique products or improving their current products.
Research and development credits are typically given to companies in science-based fields; however, sometimes other jobs or activities can qualify you for the credit.
There are even relatively minor things you can do that can qualify you for a tax credit, such as making your business accessible to disabled individuals.
Obtaining your tax credits
You must fill out a different form for each specific tax credit. Identifying the correct forms, filling them out properly and verifying that you qualify for the credits can get complex, so you might want to consider having professional assistance.