4 Questions You Must Ask To Capture More Business Tax Incentives

Written by Darren Labrie, CPA. Updated Mar 24, 2015.

capture more business tax incentivesWhile there are many ways to maximize tax savings for corporate clients, CPAs working to improve their clients’ tax budgets should thoroughly investigate corporate tax incentive opportunities before they are satisfied with a tax-saving plan. 

It’s important to be aware of events that lead to capturing your client’s business tax incentives, because you are able to take advantage of more benefits with a proactive rather than reactive approach. 

How much do you know about ways to qualify for employment tax credits, research and development tax credits or the WOTC program? 

Many tax incentive programs require prior notification or a specific action before your client’s business makes an investment. 

For example, your client may be involved in strategic planning and creating timeframes for key investments such as increased employment in certain areas, relocation of existing facilities, opening new buildings and the purchase of new equipment. 

As a CPA, you should be aware of these opportunities to maximize tax savings and take the appropriate action to secure tax incentive benefits. As you manage your client’s tax budget, keep these four questions in mind: 

1. Does Your Client Hire More Than 100 Employees Annually? 

Your client’s business may qualify for a number of federal and state point-of-hire employment tax credit programs even if they are filling existing positions rather than increasing overall employment. 

As such, if your client’s company hires more than 100 employees annually, you should never overlook the federal Work Opportunity Tax Credit (WOTC) program. 

The WOTC program and other state program requirements are important to keep in mind when developing a company’s onboarding process. Only with strategic planning are benefits able to be efficiently captured. 

2. Does Your Client Operate Within An Economic Development Zone? 

Designated Federal Empowerment Zones offer businesses the opportunity to qualify for an employment tax credit up to $3,000 if they operate within the zone’s boundaries. In addition to federally designated areas, state-level economic development zones should be investigated for tax incentive opportunities. 

To take advantage of this employment tax credit and maximize tax savings, you must begin with a review of each location where your client’s company operates. 

3. Is There An Upcoming Change In Physical Operations? 

If your client is planning an expansion, consolidation or relocation, there may be another tax saving opportunity available. Incentive opportunities come from investments in employment, property and capital equipment, and from training employees. 

These four criteria are all met by changes of operation. In some instances, the tax savings are significant enough to be included in the overall decision-making process in regards to potential expansion, consolidation or relocation decisions. 

While rules surrounding these tax incentives are numerous, a Tax Navigator has the expertise to guide and answer your specific questions. 

4. Does Your Client Qualify For Research And Development Tax Credits? 

Spending more than $250,000 on R&D qualifies your client for significant federal and state-level benefits. However, securing benefits through research and development tax credit programs requires stringent documentation and planning ahead. 

Talk to your client about investing in R&D credit opportunities as early as possible to ensure success in capturing this tax incentive. Pay close attention to research and development spending and make a thorough inquiry when these expenses exceed $250,000. 

Making the most of business tax incentives is a challenging, though ultimately rewarding, process. CPAs want to make sure no paperwork is left undone and no tax opportunity is missed when it comes to capturing valuable tax credits for your client. 

One beneficial way to plan ahead and design a comprehensive tax-saving strategy is to consult an industry expert who is knowledgeable on maximizing tax savings and securing corporate tax incentives. 

Do you have questions for a Tax Navigator regarding where to begin capturing employment tax credits, WOTC or research and development tax credits for your client? Call 866-444-4880 or click here to contact a tax expert at Corporate Tax Incentives.  
What Can R&D Do For You?  Discover a practical approach to maximizing your federal research and  development tax credit. Download Guide

Topics: R&D Tax Credit, Employment Incentives

Darren Labrie, CPA

Written by Darren Labrie, CPA

Darren brings more than 20 years of experience in tax credits and business incentives. In his current role, he focuses on the overall operations of the practice and ensuring the highest level of service to clients.