Knowlopedia
Valued Contributor
Small businesses are the backbone of our economy, and they often face unique challenges when it comes to taxes. Fortunately, there are a number of tax breaks available for small businesses that can help them save money and stay competitive.
One of the most common tax breaks for small businesses is the Small Business Health Care Tax Credit. This credit allows eligible employers to receive up to 50% off their health insurance premiums if they provide coverage to their employees. The credit is only available to employers with fewer than 25 full-time equivalent employees who earn an average wage of less than $50,000 per year.
Another popular tax break for small business owners is the Section 179 Deduction. This deduction allows business owners to deduct up to $1 million in capital investments from their taxable income each year. This includes equipment purchases such as computers, furniture, and machinery that are used in the operation of a business.
The Work Opportunity Tax Credit (WOTC) provides another great way for small businesses to save on taxes by providing a federal income tax credit for hiring certain individuals from targeted groups such as veterans or people receiving public assistance benefits like SNAP or TANF. The amount of the credit varies depending on how long an employee works at your company and other factors but can be as much as $9,600 per new hire in some cases!
Finally, many states offer additional tax incentives specifically designed for small businesses including credits or deductions related to job creation or research & development expenses among others. It’s important for any small business owner looking into these options to check with their state government website or contact a local accountant familiar with local laws before taking advantage of any potential savings opportunities so they don’t miss out on any potential benefits!
One of the most common tax breaks for small businesses is the Small Business Health Care Tax Credit. This credit allows eligible employers to receive up to 50% off their health insurance premiums if they provide coverage to their employees. The credit is only available to employers with fewer than 25 full-time equivalent employees who earn an average wage of less than $50,000 per year.
Another popular tax break for small business owners is the Section 179 Deduction. This deduction allows business owners to deduct up to $1 million in capital investments from their taxable income each year. This includes equipment purchases such as computers, furniture, and machinery that are used in the operation of a business.
The Work Opportunity Tax Credit (WOTC) provides another great way for small businesses to save on taxes by providing a federal income tax credit for hiring certain individuals from targeted groups such as veterans or people receiving public assistance benefits like SNAP or TANF. The amount of the credit varies depending on how long an employee works at your company and other factors but can be as much as $9,600 per new hire in some cases!
Finally, many states offer additional tax incentives specifically designed for small businesses including credits or deductions related to job creation or research & development expenses among others. It’s important for any small business owner looking into these options to check with their state government website or contact a local accountant familiar with local laws before taking advantage of any potential savings opportunities so they don’t miss out on any potential benefits!
