Tax Credits That Could Transform Your Small Business

Unlock Tax Savings for Your Business: A CPA’s Guide to Maximizing Tax Credits

Running a business is no walk in the park. It’s expensive, it’s challenging, and the stakes are high. But here’s the silver lining: the IRS doesn’t just take—it gives back. Tax credits are your secret weapon to turn expenses into opportunities. These aren’t just numbers on a spreadsheet; they’re real dollars that can fuel your growth, reward your team, and position your business for long-term success.

In this article, we’ll demystify tax credits, show you how they’re different from deductions, and spotlight the ones that can make a big impact on your bottom line. It’s time to stop leaving money on the table.

Tax Credits vs. Deductions: What’s the Difference?

Here’s the deal: tax credits are the cool kids of the tax world. Why? Because they’re dollar-for-dollar reductions of your tax liability. Got a $1,000 credit? Your tax bill goes down by $1,000. Easy math, big impact. Tax deductions, while valuable, only reduce your taxable income—how much you actually save depends on your tax bracket. Bottom line? Credits pack more punch.

Tax Credits Every Business Owner Should Know

Let’s get down to brass tacks. These tax credits aren’t just beneficial—they’re essential tools for smart, savvy business owners who want to optimize their operations. Here are the big players:

1. Family and Medical Leave Credit (FMLC)

Want to do right by your employees and get rewarded for it? The FMLC offers a credit ranging from 12.5% to 25% of eligible wages for businesses that provide paid family and medical leave. Here’s what you need:

• A written policy offering at least two weeks of paid leave.
• At least 50% of employees’ regular wages covered during leave.
• Employees who’ve been with you for at least a year.

Claim this credit with IRS Form 8994.

2. Child Care Credit

This one’s a no-brainer if you care about supporting working families. Cover up to $150,000 in qualified childcare expenses by:

• Building or expanding on-site childcare facilities.
• Paying for operating childcare services.
• Partnering with external childcare providers for your employees’ benefit.

You can claim 25% of childcare facility expenses and 10% of referral costs. Use IRS Form 8882.

3. Health Insurance Credit

Here’s a win-win: offer health insurance to your employees and claim up to 50% of premium costs. To qualify:

• You must have fewer than 25 full-time employees.
• Pay at least 50% of employees’ premiums.
• Keep average employee wages under $56,000 (adjusted annually).
• Purchase coverage through the Small Business Health Options Program (SHOP).

Claim this credit with IRS Form 8941.

4. Employee Pension Plan Credit

Retirement savings are good for your employees and your taxes. Small businesses starting a pension plan can claim up to $500 per year for three years or 50% of eligible startup costs. You’ll need:

• Fewer than 100 employees, each earning at least $5,000 annually.
• No existing retirement plan in the last three years.

File with IRS Form 8881.

5. Disabled Access Credit

Inclusivity pays—literally. If you’ve made your business more accessible to people with disabilities, you could claim a credit for 50% of expenses over $250, up to $10,250. This includes:

• Installing ramps.
• Modifying restrooms.
• Purchasing accessible equipment.

File this credit with IRS Form 8826.

Navigating the Paperwork

We get it: IRS forms aren’t exactly light reading. The complexity of these credits can be intimidating, and mistakes can cost you. That’s where a CPA comes in. I’ll handle the heavy lifting, from identifying eligible credits to filing the right forms, so you don’t miss a single opportunity.

Why Tax Credits Matter

Tax credits aren’t just a bonus; they’re a strategic advantage. Whether it’s upgrading your facilities, rewarding employees, or investing in sustainability, these credits make it easier to do the right thing while bolstering your bottom line.

Here’s what you can do with the savings:

• Expand your team.
• Invest in cutting-edge technology.
• Enhance employee benefits.
• Strengthen your financial position.

Let’s Make Tax Credits Work for You

Tax credits are there for the taking—if you know how to claim them. Let’s work together to ensure your business doesn’t leave money on the table. With my expertise as a CPA, we’ll identify the credits you’re eligible for, streamline the filing process, and maximize your savings.

Book a free consultation today. Let’s turn tax credits into a powerful growth engine for your business. The IRS has already set the stage; now it’s your turn to act.

Let’s make those credits work harder than ever for you!