Accounting, Bookkeeping, Invoicing Blog Posts | Page 2

Tax credits are a great way to lower the amount of taxes you owe the IRS and can even increase your tax refund if you’re lucky. With over 30 tax credits available to small business owners, it can be overwhelming to learn which tax breaks you should (or are allowed to) take.

A tax deduction is a business expense you can use to reduce your total taxable income. According to the IRS, expenses that qualify for deduction must be “both ordinary and necessary.” Expenses that meet these requirements can be written off on your tax return, saving you hundreds or potentially thousands of dollars each tax season.

ERC refund, ERC loan, ERC grant. What’s the difference? Which one is right? How do you apply? We’ll walk you through the basics of the Employee Retention Credit (ERC) and how you can take advantage of this unique tax credit.

Employee Retention Credit fees are fees that are paid to a CPA, tax expert, ERC specialist, or other expert that claims the ERC on a business’s behalf.

While the ERC program does have a few similarities to grant programs, there is not an actual ERC grant. Instead, the ERC is a refundable tax credit available to eligible small businesses that kept employees on payroll throughout 2020 and 2021.

To qualify for ERC in 2020, businesses must have paid qualified wages to employees from March 13, 2020, through December 31, 2020. To qualify for ERC in 2021, businesses must have paid qualified wages to employees during the period of January 1, 2021, through September 30, 2021.

You may qualify for an ERC loan if you have a valid and verifiable ERC claim filed with the IRS. In most cases, lenders will not look at factors like personal credit score or business revenue, but this varies based on the company you opt to work with.

If you have questions about the employee retention credit, you’re not alone. That’s why we’ve created this employee retention credit FAQ guide to answer all of your questions.

You can claim the R&D credit yourself by completing and filing the appropriate tax forms with your federal income tax return. However, due to the complexities of the tax credit, many business owners opt to use tax credit software or services to simplify the process.

Yes, you can claim the R&D tax credit every year, provided you have qualified research and development expenses. In order to claim the credit, you must meet all requirements of the IRS and you must file the appropriate forms with your income tax return.