Editor’s Note: This guest post is brought to you by Zach Olson, CEO & Co-founder of Tax Alli. His opinions are his own.
At this time of the year, most people start looking back at all they have accomplished, and preparing for the end of year holidays. However, as a business owner, you are more likely thinking about your impending tax return. You are probably wondering if you can still lower your tax bill for this year. What are some things you can do to minimize the tax bite?
One source of tax breaks is your employees. There are a few things you can do for your employees that make your their lives better while giving you a break on your taxes.
Setting up a retirement program
While everyone agrees that saving for retirement is something that they should do, not everyone takes the time to do so. By setting up a retirement plan for your employees, you illustrate to them the importance of planning for retirement. In addition, you can get a credit for setting up a retirement plan. The credit for doing this is 50 percent of the costs you spent to set up or maintain a new qualified plan, with a maximum credit of $500 in the first three years that the plan is in effect. Keep in mind that this credit is only available to you if you have 100 or fewer employees, and have not maintained a qualified retirement plan in the three years immediately preceding the first year this plan put into effect.
Making your facilities disability-accessible
More and more people with disabilities are entering the workforce, and are making a significant contribution to their employer’s profits. The Americans with Disabilities Act of 1990 mandated that businesses open to the public must remove any physical barriers to the disabled. This would include your employees. You will be allowed to claim a tax credit for costs to make your facility handicapped accessible, if the costs exceed $250, but do not exceed $10,250. This would include amounts not only for removal of physical barriers, but expenses related to interpreters and devices for the deaf and blind.
Purchase a healthcare plan
The Affordable Care Act has been in the news for the past several years. While has been controversial, you can take advantage of the credit offered for purchasing a plan that enrolls employees in a qualified health plan offered through a Small Business Health Options Program (SHOP) Marketplace, or some other vendor if you qualify for an exception to purchasing a plan through a SHOP Marketplace. You can take a credit up to 50 percent of the premiums you paid. Keep in mind that this credit is only available for two consecutive tax years.
Paying bonuses early
You certainly appreciate the hard work your employees put in to make your company great. Why not give them a bonus? This idea not only gives you another write off, but you also don’t have to make the payment by December 31st. The IRS allows you to pay the bonus within two and one-half months of the end of your tax year and still take a deduction for it.
There are few ways to take care of your employees and be able to get a tax break. Take a look into the options presented, and do something for your employees and get a smaller tax bill.
Zach Olson is the Founder & CEO of TaxAlli.com. At Tax Alli, we pair you with real life accountants and use cloud software to make small business accounting awesome. So you can do what you love while we handle the rest.