For every dollar of income that’s taxed, there’s a tax credit out there with your name on it. Or so it seems.
For example, incentives and credits are available to businesses that hire veterans, members of targeted groups, and welfare recipients. Other credits reward businesses that locate in federal Empowerment Zones or Renewal Communities. These incentives and credits have joined more commonly known tax breaks such as:
- Building renovations;
- Equipment purchases; and
- Travel and entertainment expenses.
Billions of dollars of federal and state tax credits go unclaimed every year, according to one industry source.
Because the tax codes are harder to navigate through than a blizzard, you should rely on a dedicated team of tax experts to help your business collect every possible penny.
Specialized tax-service companies are located in nearly every community. (Look in the Yellow Pages under “Taxes—Consultants & Representatives”.) Others are available online—a Google search of “tax credit services” yielded more than 76 million pages!
A tax-credit services agency should not only be thoroughly knowledgeable about the tax codes but also familiar with your business; if not, the learning curve should be swift. Seek out these services as far in advance as possible to make sure the company has enough time to go through your books and recognize what to claim.
Alternatively, professional employer organizations (PEOs), which manage human relations for businesses, may include tax-credit services as it relates to your HR practices. If you already engage a PEO, consult your representative to see whether this service is available. If not, your insurance broker might be a good place to start looking for more information, because PEOs frequently handle risk-loss-related services such as workers compensation and health insurance.