Month: October 2025

The U.S. tax code provides several deductions and tax credits designed to ease the financial burden of hiring, incentivizing employers to expand their workforce. From the Work Opportunity Tax Credit (WOTC) to the Disabled Access Credit, understanding and leveraging these hiring-related tax benefits can improve your business’ bottom line while supporting growth.

A business owner in Hudson was looking to grow his business, bringing on several new employees. Curious if there might be any tax benefits associated with this hiring, he contacted the team at Merrimack Tax Associates for advice.

Tax Credits for Hiring Certain Employees

One of the most well-known hiring incentives is the Work Opportunity Tax Credit (WOTC). This credit is available to employers who hire individuals from specific target groups that traditionally face barriers to employment, such as veterans, long-term unemployment recipients, ex-felons, or individuals receiving government assistance. The WOTC can reduce an employer’s federal tax liability by a substantial amount, sometimes thousands of dollars per qualifying employee, depending on wages paid and the target group category. Employers need to complete IRS Form 8850 and submit it to the state workforce agency to certify eligibility.

Another important credit to consider is the Disabled Access Credit, which indirectly benefits hiring. While it is primarily focused on making workplaces accessible for employees or customers with disabilities, it allows small businesses to claim a tax credit for expenditures that improve accessibility. When hiring employees with disabilities, costs incurred to adapt the workspace may be partially offset by this credit, making inclusive hiring both socially responsible and financially advantageous.

Deductible Hiring Expenses

Beyond tax credits, employers can deduct several hiring-related expenses directly from their taxable income. Costs associated with recruiting new employees such as job advertising, background checks, and recruiter fees are generally deductible as ordinary and necessary business expenses. Training and onboarding expenses are another area where deductions are available. Employers can deduct costs related to new employee orientation programs, training materials, and even certain educational seminars or workshops.

Strategic Planning for Maximum Benefit

To make the most of hiring-related tax deductions, proper documentation and strategic planning are essential. Employers should maintain thorough records of all recruitment, training, and onboarding expenses, along with any forms submitted to claim tax credits like the WOTC. Working with a tax professional like Merrimack Tax Associates can ensure that no eligible deductions or credits are overlooked, and that filings are completed accurately and on time. By proactively tracking expenses and understanding the available credits, businesses can reduce their tax liability while making new hires more affordable.

By understanding and taking advantage of these hiring-related tax incentives, businesses can grow their workforce responsibly, support employee development, and enhance overall financial efficiency. Proper planning, documentation, and consultation with tax professionals ensure that employers maximize every available benefit, turning the cost of hiring into a strategic investment in their future. The business owner in Hudson now has the understanding and information to move forward with his hiring plans, while paying attention to possible tax deductions in the process.

Every year, vehicle owners receive an excise bill often referred to as car tax, road tax, or vehicle excise duty (VED). While many taxpayers treat it as just another bill to pay, vehicle excise documentation is actually an important piece of evidence for tax and financial recordkeeping. For accountants and clients alike, having the vehicle excise bill at tax time ensures compliance, supports accurate deductions where applicable, and provides clarity for both personal and business vehicle expenses.

An Amherst resident, diligent about maintaining her tax paperwork all year, had recently received the excise bill for her vehicle. As she set this documentation aside with her other paperwork, she couldn’t help wondering why this was a necessary part of her tax return. The team at Merrimack Tax Associates was happy to answer her question.

Proof of Compliance and Accurate Recordkeeping

The vehicle excise bill is official proof that road taxes have been paid for a particular vehicle. For businesses that operate company cars or vehicles for work purposes, maintaining these bills is essential for accurate financial reporting. The bill typically shows the vehicle registration number, tax period, amount paid, and the class of vehicle. When filing taxes, accountants use this information to reconcile vehicle-related expenses, ensuring that all payments are accounted for and that the client is compliant with government regulations.

Without the vehicle excise bill, there is no clear record that the duty has been paid. This can be problematic if tax authorities request verification of business vehicle expenses or if an audit occurs. Maintaining organized excise bills helps accountants provide proof quickly, avoiding unnecessary penalties, fines, or questions from regulatory authorities. Even for personal tax purposes, having a record of vehicle excise payments can help establish legitimate expenses for those who use their personal vehicle for work-related travel and may claim mileage or other deductions.

Supporting Business Vehicle Deductions

For businesses, vehicle excise bills also play a role in maximizing eligible deductions. Company-owned vehicles or vehicles used for business purposes often have associated costs that are deductible, including fuel, insurance, and maintenance. In some cases, vehicle excise duty itself can be deductible if the vehicle is exclusively used for business purposes. Having the excise bill ensures that the expense is properly documented, supporting any deductions claimed on tax returns.

Accurate records also help accountants differentiate between personal and business use. For example, a business that provides cars to employees must be able to demonstrate which vehicles are used for work-related travel and the taxes paid for those vehicles. Excise bills serve as part of this documentation, allowing for clear, defensible reporting in case of audits or inquiries. Without them, deductions may be questioned or disallowed, potentially increasing tax liability for the business.

Vehicle excise bills are more than routine payments, they are proof of compliance, a critical piece of documentation for business vehicle deductions, and an important tool for organized financial management. Whether for personal or business purposes, maintaining these bills and providing them to your accountant at tax time ensures accurate reporting, supports potential deductions, and safeguards against regulatory issues. The Amherst resident now has a better understanding about why she is saving this important paperwork, giving the incentive for her to continue her diligence.