January 2, 2024

Maximizing Tax Credits for Small Businesses

As a small business owner, you’re constantly looking for ways to maximize your profits and minimize your expenses. One often overlooked opportunity for savings is through tax credits. Tax credits can significantly reduce your tax liability, putting more money back into your business. At Tax Credit Group, we specialize in helping businesses like yours navigate the complex world of tax credits to maximize your savings.

Research and Development Tax Credit

Many small businesses are unaware that they may be eligible for the Research and Development (R&D) tax credit. This credit is designed to incentivize businesses to invest in innovation and technological advancement. If your business engages in activities such as developing new products, processes, or software, you could be eligible for substantial tax savings. Our team at Tax Credit Group can help you identify qualifying R&D activities and ensure that you claim the credit accurately.

Work Opportunity Tax Credit

The Work Opportunity Tax Credit (WOTC) is another valuable credit that many small businesses overlook. This credit is designed to encourage the hiring of individuals from certain target groups, such as veterans, ex-felons, and individuals receiving government assistance. By hiring from these groups, your business could be eligible for a tax credit ranging from $1,200 to $9,600 per qualified employee. Our experts can assist you in navigating the WOTC program and maximizing your potential savings.

Energy-Efficient Tax Credits

Investing in energy-efficient equipment and facilities can not only save your business money on operating costs but also make you eligible for valuable tax credits. There are various federal and state tax credits available for businesses that invest in energy-efficient technologies, such as solar panels, energy-efficient HVAC systems, and electric vehicles. Our team can help you identify eligible energy-efficient investments and ensure that you claim the available tax credits.

Maximizing Your Tax Credits with Tax Credit Group

When you partner with Tax Credit Group, you can expect personalized attention and a thorough analysis of your business activities to identify all potential tax credit opportunities. We’ll work closely with you to ensure that you’re taking full advantage of available credits, maximizing your tax savings, and ultimately improving your bottom line.

Contact Tax Credit Group today to learn how we can help you maximize your tax credits and keep more money in your business’s pocket.

September 1, 2023

Getting started with Work Opportunity Tax Credits (WOTC)

Getting started with Work Opportunity Tax Credits (WOTC) can be a beneficial strategy for your business to save on taxes while also promoting diversity and providing employment opportunities to specific target groups. WOTC is a federal program in the United States that offers tax incentives to employers who hire individuals from certain disadvantaged backgrounds. Here’s a TOP TEN step-by-step guide to help you get started using WOTC for your business:

Understand WOTC Eligibility Criteria: Familiarize yourself with the different target groups that qualify for WOTC. These include veterans, individuals receiving Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP) recipients, ex-felons, individuals with disabilities, and more. Each target group has its own eligibility requirements.
Determine Eligible Hires: Identify potential candidates who belong to the eligible target groups. When you’re hiring new employees, consider individuals who meet the criteria for WOTC. You can also consider reviewing your current workforce to see if any existing employees qualify for retroactive credits.
Complete Required Documentation: For each eligible hire, you need to complete the necessary paperwork to qualify for the tax credit. This includes the IRS Form 8850, “Pre-Screening Notice and Certification Request for the Work Opportunity Credit.” This form requires both the employer and the new employee to provide information about the employee’s background and eligibility.
Submit to the State Workforce Agency (SWA): Submit Form 8850 to your State Workforce Agency (SWA) within 28 days of the employee’s start date. The SWA will evaluate the information and issue a certification if the employee meets the eligibility requirements for WOTC.
Receive Certification: If the SWA determines that the new employee qualifies for WOTC, they will issue a certification known as ETA Form 9061 or ETA Form 9062. You’ll need this certification to claim the tax credit.
Claim the Tax Credit: Include the relevant certification with your business’s tax return when you file your taxes. The amount of the credit varies based on the target group and the number of hours the employee works. The tax credit can significantly reduce your tax liability.
Keep Records: Maintain thorough records of all the documentation related to WOTC. This includes the initial pre-screening form, the SWA certification, and any other relevant paperwork. Keeping accurate records will help you during tax audits and ensure compliance with the program’s requirements.
Monitor Deadlines: Be mindful of deadlines for submitting the required forms. Timeliness is crucial to secure the tax credit. Make sure to adhere to the 28-day window for submitting Form 8850 to the SWA.
Stay Informed: The regulations and eligibility criteria for WOTC can change over time. Stay informed about any updates or changes to the program to ensure you’re taking full advantage of available incentives.
Consult Professionals: If you’re unsure about the WOTC process or how to maximize the benefits, consider seeking advice from tax professionals or consultants who are well-versed in employment tax incentives.

By following these steps and actively participating in the WOTC program, your business can not only reduce its tax liability but also contribute to the economic empowerment of individuals from disadvantaged backgrounds. At Tax Credit Group, we can help your business gain a better understanding of the WOTC available. Give us a call at (563) 583-2115 to get started today, or schedule an appointment with one of our advisors.

July 1, 2023

Understanding the Research and Development Tax Credit

The Research and Development (R&D) Tax Credit is a valuable tax incentive program that rewards businesses for investing in innovation. The credit is designed to encourage businesses to conduct research and development activities that will lead to new or improved products, processes, or software.

Here are some key things business owners should know about the R&D Tax Credit:

What activities qualify for the credit?

The R&D Tax Credit is available to businesses of all sizes and across all industries. Eligible activities can include developing new products, processes, or software, improving existing products, processes, or software, and conducting research to resolve technical uncertainties. The IRS provides a comprehensive list of eligible activities on its website.

Who is eligible for the credit?

Any business that incurs expenses related to eligible R&D activities may be eligible for the credit. This includes businesses of all sizes and structures, including corporations, partnerships, and sole proprietorships.

How much is the credit worth?

The credit is worth up to 20% of qualified research expenses (QREs) for the current year over a base amount. The base amount is calculated based on the business’s historical R&D spending. The credit can be applied against income tax liabilities or, for qualified small businesses, against payroll taxes.

How can businesses claim the credit?

Businesses must first conduct eligible research and development activities and maintain detailed documentation to support their claim. This includes identifying qualified research activities and expenses, and calculating the credit amount. To claim the credit, businesses must file Form 6765 with their tax return. The form requires detailed information on the business’s eligible R&D expenses and activities.

We can Help!

By partnering with Tax Credit Group, businesses can receive expert guidance and support throughout the R&D tax credit process, ensuring that they are maximizing their eligible tax credits and minimizing the risk of errors. Call us today to learn more about how our team can help your business take full advantage of this valuable incentive program.