BUSINESS TOOLS Maximize Your Returns

Now is the time to think about lowering your tax liability through tax incentives.

By Matthew Carlson

Tax season has wrapped up, and for many business owners, it’s a weight off the shoulders as it is often a stressful time of year. Tax filing can feel like a headache. It requires pulling together and organizing a mix of documents and financial information for a streamlined filing process. Because tax filing can be so

Contributor complex and convoluted at times, business owners may not realize that they are missing potential tax deductions and incentives to lower their tax liability and generate cash flow for upcoming projects.

Matthew Carlson is a tax incentives manager at BerganKDV, where he partners with clients to identify and submit for tax incentives to maximize returns.

Now is a good time to start preparing and reviewing your business plans for tax incentive opportunities. Every state and most municipalities have varying tax incentives for businesses that meet certain criteria. For instance, owners may be able to deduct expenses if they conducted recent research and development, generated tax credits/incentives for new capital expenditures, or hired and trained additional qualified employees. Determining which incentives you qualify for can be challenging because they vary, but here are common qualifiers in your capital expenditure and growth plans to look out for. To ensure you are taking advantage of the available incentives, here are a few guiding questions as you review your business plans:

1 Do you have capital expenditures planned over the next two to three years? Are you planning for any new equipment purchases? Are you considering building renovations or expansions? Will you have any new leases?

2 What are your hiring plans for forecasts for the next two to three years?

3 Do you have locations in other states? What are your capital expenditure and hiring plans for those locations?

4 Do you have any training planned for new or existing employees?

5 Does your company do research and development (R&D)? If so, what are your plans related to R&D over the next two to three years?

6. Has your project started yet? Where are you in the process? Are you considering working in any other states?

If any of the above questions apply to you, there are most likely tax incentives available that could help you achieve your business goals and generate cash flow for your project. Business owners have a lot of responsibilities and tasks to keep track of, so it’s understandable that finding the time to dive into business plans and identify and apply for incentives may not seem possible.

If this sounds familiar, you may want to consider partnering with a tax advisor who can evaluate your business structure and determine which incentives you may qualify for. By collaborating with a tax advisor, you can take the guesswork out of applying for tax benefits and hoping one works out, and instead be assured that you’re using all the tax benefits available to your business.