What Are Tax Credits?

Tax credits are deductions offered by most states and the federal government to encourage economic growth. These tools are designed to attract and retain businesses. They also help businesses save money on federal and state income tax returns.

Are Tax Credits Available for Small Businesses?

Tax credits are available for businesses of all sizes. Large corporations generally employ a team of CPA’s and attorneys, who make sure they are taking advantage of all available tax credits. Small businesses do not normally have that luxury. As a matter of fact, many small business owners we meet have never heard of tax credits or they do not know what tax credits apply to their business.

According to leading industry sources, less than 20% of companies take advantage of all available state and federal tax credits. Why? Most tax credits and incentive programs are not actively marketed by the government to the majority of businesses. In addition, the compliance, documentation requirements, and expertise needed to capture tax credits prevents most small business owners from moving forward.

Most Common Types of Tax Credits

There are several different types of tax credits available, depending on the industry, location, business practices and employees. The most commonly used tax credits available in Georgia are the Work Opportunity Tax Credits (WOTC), the Retraining Tax Credit (RTC) and Location Based Tax Credits. Research & Development and other credits are also available.

First, let’s take a closer look at WOTC, RTC and Location Based Tax Credits.  In our next article, we will discuss tax credits for R&D and others.

How Do I Get My Tax Credits?

There are state and federal resources available online for business owners who want to research and apply for tax credits and incentives. However, small business owners who want to apply for credits in-house often find the process confusing and overwhelming. The legal and compliance aspects can even be a little frightening. We offer a better way.

SmartPayroll Solutions, partnered with a team of expert consultants, helps business owners pursue comprehensive state and federal tax credits, making sure no money is left on the table. If you are ready to save on your income taxes, learn more here or contact us today and schedule your free review!