It’s never too early to start tax planning — especially for business owners! Tax incentives are great ways to reduce your taxes owed, but they can be misleading. Let us help you get started. What’s a business tax deduction? If a potential $10,000 business tax deduction ever catches your eye, it should, but it might not be worth as much as you think. A business tax deduction will reduce a company’s taxable income. This means that if your business is in a 20% tax bracket, a $10,000 deduction would only be worth $2,000 in reduced taxes. That’s still a noticeable amount of money! But while deductions can add up, it’s important to know that the raw number isn’t your total savings. It only affects your taxable income numbers. What’s a business tax credit? Used sparingly by governments, tax credits can be very powerful incentives. A business tax credit is a dollar-for-dollar reduction to your tax bill. There are numerous business tax credits in the United States, and you can often pick up their intended purpose by the title. For example, the Indian Employment Credit will give tax credits to employers who hire Native Americans. There are even business tax credits for specific industries and sectors, like the Biofuel Producer Credit. Some tax credits are refundable, which means that if your tax credit value exceeds your tax liability, you can get a refund check. However, some tax credits are nonrefundable, which means your $5,000 tax credit on a $4,000 tax bill will not result in a $1,000 refund check. The IRS has a list of forms and credits on their website, but it’s often best to consult with a local tax expert (such as our own Tyler Q. Dahl!). Why do credits and deductions matter? As a business owner, you’re in the business of making money, so it’s useful to know all of the resources you have available to save money on your regular tax expenses. With the right knowledge of your industry, tax incentives, and tax planning, you might be able to save more money than you have ever before — increasing your profit margins significantly. If you have any questions, don’t hesitate to reach out to our team. Business tax can be an immensely confusing journey, but with the right guidance, it’ll make your company’s growth smoother and cheaper. Business Tax Deductions vs. Tax Credits: What’s the Difference?
Hi new friends! My name is Beckett, and I’m a 9-year- old English Bulldog/Pug. My favorite thing in the world is hanging out with my mom — I’ve even been called a mama’s boy. Luckily, I’m her only child, so I get all of the love and snuggles. Sometimes she and Dad even let me cozy up on the couch with them. Apart from time with Mom, my favorite things in the world are my long walks (I get them twice a day!) and the treats Dad sneaks me under the dinner table. At TQDLaw.com/PetOfTheMonth , you can enter your pet for the chance to be featured in our monthly newsletter and win a $25 gift card to a local eatery. Don’t forget to tell your friends and family, too — anyone can submit their pet! We love and consider all types of pets, including those without fur. #TQDLAW Pet of the Month Beckett the English Bulldog/Pug
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