Are You Taking All the Tax Credits You Can?
In December 2015, the Protecting Americans from Tax Hikes (PATH) Act was passed. The PATH Act has seen a lot of benefit to business owners. Small and mid-sized manufacturers distributors can now benefit more from these credits than they have in the past.
Your CPA is the best resource for information about tax credits, but here is a quick read to give you an idea of the credits that may be available.
If your business is eligible, you can now claim the credit against the Alternative Minimum Tax (AMT) to offset AMT for tax years beginning after December 31, 2015. Certain start-up businesses can offset payroll taxes with this credit. Many manufacturers distributors don’t realize they can qualify.
Think you won’t qualify for the R&D tax credit? The definition of research and development is broader than you think. Are you making parts for larger customers that require mold builders, plastic injection molders, tool and die makers, metal stampers and fabricators, precision machinists, or other similar expenditures? You might be able to use this credit.
Costs incurred by experimenting with different designs, prototyping with AM technology, designing and engineering new parts, and certain software development should all be recorded. These can potentially be used to take advantage of tax credits. If you are documenting your qualified costs, you’re already ahead of the game.
If you have any questions about tax credits or any other issues pertaining to your business, please contact our CPAs and we will be happy to help. The full article can be found here.