Tax Credits Your Small Business Might Be Missing Out On Nashua Small Business Owner Looks for Suggestions

There is a lot that goes into running a small business. One area that many small businesses commonly overlook is tax credits that they may be entitled to. Unlike deductions, which reduce taxable income, tax credits directly reduce the amount of tax owed. That means tax credits can provide real savings. Many times, small businesses are not even aware of these potential tax credits, leaving them paying more in taxes than they should.

A small business owner in Nashua was concerned about the amount of her business’ revenue that was going to taxes. Hoping to find ways to reduce her overall tax bill, she contacted the team at Merrimack Tax Associates for recommendations.

Tax Credits Available for Small Businesses

Many business owners assume the R&D (Research and Development) credit is only for tech companies or large corporations, but that is not the case. If your business develops new products, improves processes, or creates prototypes, you may qualify for this credit. Even activities like testing new software, improving packaging, or streamlining operations could make you eligible for this money-saving credit.

If you have hired employees from certain groups that face barriers to employment, including veterans, long-term unemployment recipients, or individuals receiving government assistance you may qualify for the Work Opportunity Tax Credit. This credit is worth up to $9,600 per employee, depending on the category and hours worked.

If you’ve made your business more accessible to customers with disabilities through improvement projects such as installing ramps, modifying restrooms, or providing accessible technology, you may qualify for the Disabled Access Credit. This credit is designed to help small businesses cover the costs of compliance with the Americans with Disabilities Act.

Starting a retirement plan for your employees doesn’t just benefit them, it can also benefit your business. The IRS offers a tax credit to small businesses that establish retirement plans like a 401(k) or SIMPLE IRA for employees. This credit helps cover the setup fees and administrative costs.

Tax credits can provide significant savings, but many small business owners miss out simply because they don’t know what is available. Each credit comes with specific rules and qualifications, so it is important to review your situation carefully. The Nashua business owner was pleased to learn about these potential tax credits that can reduce her tax bill in the future.