Around this time of year, many organizations are re-evaluating their annual budgets to improve profit margins and consolidate spending. One aspect of this process often includes exploring new or revised tax credits that can help offset the amount of money owed to the federal and state governments. Unfortunately, many organizations fail to recognize every tax credit they are eligible to receive. This oversight can happen for several reasons, including:
- obsolete technology,
- inadequate processes and
- difficulty keeping up with the complex tax credit landscape.
Whether you are an individual taxpayer or a small business owner, understanding your tax credit eligibility is important. The good news is that there are resources and processes designed to help you monitor and navigate the complex tax credit landscape. Utilizing such tools can help capture 2017 credits as well as retroactive 2016 tax credit opportunities.
Both the federal and state government administer tax credit programs, each having defined eligibility requirements and refund amounts. In some instances, county and city governments even offer localized tax credits to encourage specific activities. The most common business tax credits nationwide include:
- Hiring and employment
Taking advantage of tax credits from 2016 and the upcoming year can help your organization reduce its tax liability, lower its tax rate and improve the bottom line. For businesses that operate in multiple states, it is essential to understand the variations between credits because businesses based in certain states may be eligible to retroactively claim specific tax credits. For instance, 2016 tax credits that focus on job creation and property investments are still available.
Is your organization taking advantage of both state and federal tax credits? Consult with one of our tax professionals to ensure you are receiving the maximum amount due to you.