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27 Business Tax Credits From The IRS

November 27th, 2009 by Matthew C. Keegan | 8 Comments | Filed in Business Services, News

The Internal Revenue Service (IRS) may have a wonderful Christmas gift for your business this holiday season: a tax credit. Tax credits come in handy as they are subtracted from the taxes you owe, effectively reducing your overall tax burden. However, unlike most gifts bestowed you have to look for them yourself.

IRS Form 3800

tax formsIRS Form 3800 (General Business Credit) is worth exploring as it gives businesses credits for a wide variety of reasons including making your facility accessible to the handicapped; for increasing your research activities; for using biodiesel and/or renewable diesel fuels; credits for your business’ contribution to select community development corporations; purchase of energy efficient appliances; the list goes on.

According to the IRS, “Your general business credit for the year consists of your carry forward of business credits from prior years plus the total of your current year business credits. In addition, your general business credit for the current year may be increased later by the carry back of business credits from later years. You subtract this credit directly from your tax.”

Reduce Your Tax Burden

You can carry back by one year or you can carry your credit forward for as many as 20 years. As your business grows and becomes more profitable, those tax credits can reduce your overall federal tax burden for many years to come.

So exactly what is covered by the IRS? Plenty, actually. The following are the current tax credits and the forms you should obtain in addition to including Form 3800 with your tax return:

  • Form 3468, Investment Credit
    This consists of the sum of the rehabilitation, energy, and reforestation credits.
  • Form 5735, American Samoa Economic Development Credit
  • Form 5884, Work Opportunity Credit
  • Form 6478, Credit for Alcohol Used as Fuel
  • Form 6765, Credit for Increasing Research Activities
  • Form 8586, Low-Income Housing Credit
  • Form 8611, Recapture of Low-Income Housing Credit
  • Form 8820, Orphan Drug Credit
  • Form 8826, Disabled Access Credit
  • Form 8834, Qualified Electric Vehicle Credit
  • Form 8835, Renewable Electricity Production Credit
  • Form 8844, Empowerment Zone Employment Credit
  • Form 8845, Indian Employment Credit
  • Form 8846, Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips
  • Form 8847, Credit for Contributions to Selected Community Development Corporations
  • Form 8864, Biodiesel and Renewable Diesel Fuels Credit
  • Form 8874, New Markets Credit
  • Form 8881, Credit for Small Employer Pension Plan Startup Costs
  • Form 8882, Credit for Employer-Provided Childcare Facilities and Services
  • Form 8896, Low Sulfur Diesel Fuel Production Credit
  • Form 8900, Qualified Railroad Track Maintenance Credit
  • Form 8906, Distilled Spirits Credit
  • Form 8907, Nonconventional Source Fuel Credit
  • Form 8908, Energy Efficient Home Credit
  • Form 8910, Alternative Motor Vehicle Credit
  • Form 8911, Alternative Fuel Vehicle Refueling Property Credit
  • Form 8923, Mine Rescue Team Training Credit

Your accountant is probably aware of all of these credits, but at least you have a list to help you look for ways to reduce your overall tax burden before the year comes to a close.

Source: IRS

Adv.– Do you own a business? If you are considering selling your business, you need to determine its value first, which is based in part on what someone is willing to pay for it. If you are interested in buying a business, please check out NACBB’s current business listings to find one for you.


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I’ll Take A “V” Recovery Any Day!

October 14th, 2009 by Matthew C. Keegan | 3 Comments | Filed in News

When it comes to economic recovery following a recession, a “V” is much better than a “W” in all cases. Who would have ever thought that the economy could be boiled down to alphabetical representations, but that is exactly what V and W portend. Not sure what I mean? Then read on for your economic primer of the day.

economic graphV is for Victory and W is for Woeful. Perhaps not a perfect way to compare two types of economic recoveries, but it is an easy method nonetheless.

V Beats W

Essentially, a V-shaped recovery describes the shape of the market’s performance in a downturn. Going from top to bottom and back to top again, just like the letter V. On the other hand a W-shaped economy describes a market that has plunged, recovered somewhat, but then plunged again before recovery finally takes place. Also known as a double-dip recession, the initial recovery isn’t sustained, sending the economy down a precipice after a brief recovery.

Why are these distinctions important? For a few reasons including: A V-shaped recovery involves hitting bottom and quickly recovering. Essentially, the economy returns to the point where it was previously. A W-shaped recovery offers a similar rebound, but it is cut short as other factors such as increased job loss, national debt, higher taxes and reduced consumer spending short circuit the recovery, leading to a second drop or dip. Eventually, the economy recovers, but the period from when the recession begins until it ends is prolonged due to the secondary drop.

Double-Dip Recession?

The Obama administration is watching the recovery closely for signs of a double dip. The effects of the federal stimulus package will be wearing off by the end of this year and companies will be done rebuilding inventories which were cut back during the worst of the slump. Also weighing in right now is the effect of higher unemployment, which is expected to pass ten percent this year and government spending which has reached levels never seen previously.  Inflation, which has been contained thus far, could re-emerge — a sure sign that the economy is slipping.

Oh, just in case you wonder if “V” and “W” are the only letters used to describe a recession, the letters “U” and “L” are also used. A U-shaped recovery points to a prolonged downturn where the bottom is reached but doesn’t recover right away. Gradually, things improve but not as rapidly as a V-shaped recovery.

Other Letters

Worse, is the L-shaped recession which suggests a sudden sharp drop followed by no recovery, at least for many years. Japan experience an L-shaped recession from the late 1980s until the early years of this century, one that they eventually climbed out of thanks to the internet boom. Still, if you were to chart that recession from its onset to the new millennium, a capital “L” would have been an accurate depiction of what that Asian nation experienced.

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Is Tax Relief Really The American Way?

May 4th, 2009 by Matthew C. Keegan | 2 Comments | Filed in Commentary

Look back over our nation’s history and you soon realize that taxation has always played a big role in how Americans define themselves. One of the reasons why the American colonies broke free from England was over the issue of taxation.

speak up!Colonists felt that the British royalty was exacting too many taxes with very little representation in return. The Boston Tea Party and other acts of revolt sharpened the differences between the two parties which ultimately led to a full scale revolution and the founding of a new nation.

Tired About Taxes? Then Do Something!

These days, Americans often feel that they are being taxed to death all over again. No, the English have nothing to do with all of the anger being vented by taxpayers all across our nation. Rather, politicians in Washington, DC as well as in state capitals and even on the local level are creating much angst for tax weary citizens. Do you feel overtaxed? If you do, you can fight back which is the American way!

No, you don’t have to redo the Boston Tea Party to get the attention of elected officials. Dump something into a river today and the environmental police will jump all over you! On the other hand, you can signal loud and clear your displeasure to your politicians that “enough is enough” when it comes to taxes by taking the following steps:

Gather Signatures – Create a petition and have eligible voters sign the petition is one way that you can tell your elected officials that you demand they hold the line on taxes. In some areas of the country an online petition may be sufficient while in other areas you will have to go door to door for signatures. Expect to spend plenty of time recruiting volunteers and helpers!

Put it to Vote – In California, citizens are famous for voting on tax relief through propositions that mandate the government cap real estate taxes. If your state does not have such a method of seeking relief, you could pressure lawmakers to put forth a ballot initiative regardless. Learn what the requirements are to establish a local response.

Get out the Vote – What a sad state of affairs it is when getting half of the eligible voters out for an election is considered to be a good thing. Encourage everyone you know to vote with their feet by hitting the polling place on Election Day!

Run for Office – If you have a vision to hold taxes in line, then consider running for office yourself. Stay away from the special interest group — instead, form a true people’s voice movement to get the support that you need and the mandate necessary to help bring about real change.

Change Begins With You

Yes, tax relief can be done through the democratic process. Get involved and build a government wide tax relief model that will benefit citizens nationally. A movement starts with one person — will you be the one to get the tax relief engine started?

Adv.– Are you considering the purchase of a house or a car during this recession? For consumers who have good or excellent credit, this may be the best time to jump in to the market. You’ll also want to make sure that your emergency income levels are consistent during these times as well as have a good food storage plan in place to keep those costs under control too.


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The Tax Man Cometh!

April 15th, 2009 by Matthew C. Keegan | 2 Comments | Filed in Commentary

If you’re like millions of Americans, today isn’t one of your favorite days. In fact, April 15th is downright distressing for many taxpayers as federal and state income taxes are now due.

Tax FormsTrue, just as many Americans have received refunds or aren’t paying any taxes whatsoever, a curiously odd spin on the phrase, “taxation without representation. ” Instead, tens of millions of American are represented without having to pay any taxes whatsoever.

Everybody Should Pay Taxes

Do I think that everyone should pay taxes? Absolutely! Our great nation was founded with the idea that people should pursue their own happiness which is obtained in at least a small part by relying on themselves and working with each other, without expectation of government help.

Don’t get me wrong — I grudgingly accepted the fact that some government intervention in our lives especially in the form of social security and medicare is something that I can live with. Both programs are highly imperfect, but if they were managed properly they would provide what most older Americans need: a safety net. Unfortunately, each one is a money pit.

Your Vested Interest In America

Now back to my main point about why everyone should pay taxes: people who are looking for a vested interest (ownership) in their government (of the people) can truly only claim that interest if they contribute to the country by voting, paying taxes and through public service.

True, not everyone should join the military or work for the government — instead, community service is a much needed substitute as armies of volunteers have proven down through the ages.  Legions of people have helped build, support and sustain local, state and federal governments through their selfless and tireless actions, work that has helped to make America great.

A One Page Form Would Do

I don’t have a plan on paper which outlines how shared taxation would work, but I know that it involves a whole lot less paperwork than what most people have to deal with. The Internal Revenue Service (IRS) is mandated to collect taxes on behalf of the U.S. Treasury, but each year their tax returns seem to get longer and more difficult to figure out.

Despite the help of Turbo Tax and other tax preparation software, Americans routinely spend days accumulating forms, checking their records and inputting data. Computers have made some of the work easier, but it still takes much too long to do what should be an easy process. I’m all for straight across the board taxation, using one page of data to collect tax information much like the 1040EZ which can now only be used by single tax filers and joint filers who don’t have dependents.

There has to be an easier and more equitable way to pay and collect taxes. Any suggestions?

Adv. — Do you love paying taxes? I don’t, but much like death I can accept paying them. Better than paying taxes to the government is spending money on things that you want including kitchen countertop appliances and cookware. For excellent savings, please visit MetroKitchen, Oneida or  Pflatzgraff for the widest selection of goods online!


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