Small Business Tax Credits To Know About For Your Tech Support Business

Strategic tax planning is a proactive approach to paying taxes that minimizes the amount that a successful business must pay. This is done in a lawful way where regulations are followed and compliance is retained when it comes to paying taxes. Typically, the tax planning strategy takes place all throughout the year before taxes are filed so you know what to expect from fees and deductions. Larger businesses will often structure their business, provide employee benefits, and work on asset protection to maximize tax benefits. If you have a small business that offers both in-person and over the phone technical support, then you probably are not concerned about most of these things until your business expands. You can complete your own form of strategic business tax planning as your business grows though, by taking advantage of all the tax credits and deductions that you can. You will need to prepare during the year to receive the credits, so keep reading to learn how.

Deducting Fuel and Purchasing A Fuel Cell Motor Vehicle

If you need to drive around a great deal when it comes to your business, then you can deduct driving costs. You have the option of deducting mileage or gas on your taxes. Deducting gas is classified as an actual expense, and you will need to keep receipts as well as detailed records of the number of miles you drive to take advantage of the deduction. For example, if a filled gas tank allows you to drive 500 miles and you drive 250 miles to work and 250 miles for personal reasons, then you will be able to deduct half the cost of the gas on your business taxes. Receipts as well as mileage estimations will be needed.

If you do not want to collect receipts, then you can receive a deduction based on the number of miles you drive your vehicle for business purposes. You will need to record the mileage though. Once the mileage is recorded, the IRS will supply a mileage deduction rate and you will need to multiply the rate by your recorded business mileage.

While mileage and gas deductions can add up, you can receive a much more substantial tax credit if you purchase a new car for yourself. Of course, this should be scheduled when you need a new vehicle for business purposes, and you should look to purchase a fuel cell electric motor vehicle. Fuel cell vehicles contain a fuel cell that produces electricity by using oxygen and compressed hydrogen. This creates no emissions, and the IRS will award you for your environmentally friendly purchase with either a $4,000 or $8,000 tax credit. The credit amount depends on the year of the vehicle. Basically, if you buy a newer car, then you will get the bigger credit. 

Work Opportunity Credits

If you are the type of employer that does your part to help the less fortunate in your area, then you may try to hire individuals who are down on their luck. These people may have childcare needs, disabilities, and transportation barriers. Individuals with these difficulties are ones that find it difficult to find and keep employment, and you will be awarded with tax credits when you offer these people a job. Typically, you will be reimbursed for a certain percentage of the worker's wages for the first one or two years of their employment. You will need to fill out paperwork both before and directly after the person is hired, so you will need to prepare for this ahead of time.

Also, you should identify all the types of people who you may hire and that qualify you for the work opportunity tax credit. These people include veterans, SSI recipients, SNAP and TANF recipients, ex-felons, and people who are going through rehabilitation or empowerment programs.

You should also know that you can receive tax credits if you offer an individual a work opportunity that includes childcare cost sharing. Make sure to keep records of how much you contribute to childcare so the deduction can be made during tax season.