Tax Credits and Incentives for Businesses
If you are one of the 5.5 million businesses in the U.S., tax season is right around the corner for you (again!). The question is: are you paying too much or leaving money on the table? We recently partnered with David Albrecht of Abundant Business Solutions to discuss business tax credits. One of the most surprising things we learned is that manufacturing businesses – such as breweries and distilleries – are some of the businesses that could benefit the most from tax savings.
Note that Schaffer Law Firm, PLLC does not provide tax advice to our clients, though we have partners like David who help us provide education and tips.
As the owner of a brewery or distillery, you are deeply invested in your process and product, which makes it easy to overlook tax savings opportunities unique to your industry. The key to capitalizing on these benefits is knowing what tax credits and incentives you qualify for.
Find out more about your industry’s tax credits and how you can get started identifying them for your business:
- What is a tax credit/tax incentive and what is the difference between the two?
A tax incentive is an aspect of the country’s tax code designed to incentivize, or encourage, a particular economic activity. Many “tax incentives” simply remove part or all the burden of the tax from a market transaction taking place.
A tax credit is an amount of money that can be offset against a tax liability (the amount owed in taxes). A tax credit is the premium; it is a dollar for dollar reduction against taxes owed.
- What information do you need from a business initially to do an analysis?
Our mission at Abundant Business Solutions is to help business owners grow and prosper by keeping more of the money their business generates. The government has made billions of dollars of tax incentives available to business owners, yet more than 90% do not take advantage of them because they either do not know they exist, do not know how to access them, or incorrectly assume their CPA is already doing it- they’re NOT! – most do not have the resources or tools to do so.
There are many ways to qualify. We start by looking at the client’s industry, location (federal, state, & county can all influence), and high-level financials. In a short 15-minute assessment, we identify and quantify how much we may be able to save a business owner.
Most importantly, Abundant Business Solutions only gets paid if they are able to find or save you money. There is absolutely no cost to go through the assessment. (Schaffer Law Firm went through the assessment recently and while Dave was unable to find us any savings or money, we learned quite a bit about what to do when we reach some key milestones in our business.)
- How do I find out about tax credits/incentives in my area?
That’s why Abundant Business Solutions is here for you – we specialize in this area to help you maximize your benefits. You can always research your federal, state, and county stimulus packages on your own online. However, many of these incentives require specialized knowledge, resources, and certifications to submit. An example might be, can I get a Hiring Incentive Tax Credit for my new hires and can I determine the tax credit value in advance? You need to know the correct questions to ask, the correct government databases to query, and the correct forms to file. Would you rather have the answer in potentially less than 10 minutes, or would you prefer to invest hours on your own?
- For a brewery/distillery, what do you need to know to get started?
At a high level – I am going to ask about their facilities situation and expenses. I am going to ask about workforce & payroll, and some associated expenses. And I am going to ask about revenues. In total, I’ll ask about 10-15 questions over a 15 minute conversation.
- As a brewery/distillery, can I take advantage of R&D credits for developing new recipes?
Yes. In the bigger picture, breweries and distilleries are considered manufacturers. No other industry qualifies for more tax incentives than manufacturers. This includes Research and Development Tax Credits. R&D can extend far and wide associated with taxes for example improving your product/service, improving your processes, developing new products/services, expanding your business, and more. All have the potential to qualify for R&D credits.
One last note: Our country had the largest tax act change in more than 30 years this past year. For those who filed an extension, October 15th is fast approaching. Yes, there were many improvements. There were also many offsets. One of the biggest tax incentive programs is about to take a 40% hit in benefit to business & commercial building owners. Come October 16th it disappears. My clients are favorably experiencing five and six figure impacts. Do not delay. Inquire today to find out how much money you may lose if you don’t act now.
For more information or to contact Dave directly, go to https://abundantbs.com/