Taxes. You understand the end game is to give the IRS as little money back as possible. You may even understand that, to see actual tax savings, you must take advantage of the tax credits available to you, along with deductions and income adjustments. However, your company may be overlooking some commonly under-utilized tax credits that are proven to result in significant savings.

The following are the five most overlooked tax credits with the potential to benefit your business’s bottom line:

1. Research Incentives
   Research and development (R&D) tax credits, at the federal and state level, account for approximately  $10 billion a year in tax savings for businesses. However, while big business benefits from the R&D tax credit, smaller companies (including startups) have yet to take full advantage of this tax credit.

   Big or small, if your company has developed a new or improved product, formula, invention, patent, pilot model, process, technique and similar property, you may qualify for a R&D tax credit. Startups should get a helping hand, as innovation is the key to our country’s long-term economic growth.

2. Property Incentives
   While cost segregation tax benefits building owners are easily defined, proving eligibility for green building incentives like the 179D deduction and 45L credits requires more due diligence but offers significant tax savings.

   The 179D deduction is based on a building owner’s ability to reduce the building’s total annual energy and power costs (interior lighting systems, heating, cooling, ventilation and hot water systems) by 50 percent. If you are able to prove you made this energy reduction, and your property was placed in service after December 31, 2005 or before January 1, 2014, you are eligible to receive this deduction.

   Based on Section 45L of the Internal Revenue Code, the 45L credits equal to $2,000 per unit for newly constructed or qualified owner-occupied or rental housing units that meet certain energy-saving standards. 45L credits have multiple possible benefits for developers and investors, so it’s important to understand the finer details of this tax credit.

3. Training Incentives
   As you increase the skills, productivity and performance of your employees, training is a drain on your company’s profits. At both the state and federal level, there are training grants that pay for your training costs or reimburse you for an employee’s wages while he or she is in training.

   To prove your eligibility for a training grant, you are required to submit a training budget, job description and monthly or weekly report of wages and expenses. Also, while some training funds come as grants, most of the money gets allocated to states or local workforce boards that decide what industries and areas to support. So, the trick to receiving training grants is to search for programs aimed at your region or industry.

4. Employment Incentives
   Employment tax credits account for approximately $60 billion a year in savings on the federal, state and local government levels. These tax credits exist to encourage job creation and new business development. For example, the Work Opportunity Tax Credit (WOTC) program provides tax savings for new hires from specific target groups.

   Specific target groups include the following:

   • TANF Recipients
   • Food Stamp Recipients
   • SSI Recipients
   • Veterans
   • Designated Community Residents
   • Summer Youth Employees
   • Vocational Rehab Referrals
   • Ex-Felons
   • Disconnected Youth

   The WOTC program credit is used against an employer’s federal tax liabilities of up to $9,600 per employee. Considering that 20% of all new hires qualify for the WOTC program, eligible companies see meaningful federal income tax credits.

5. Commercial Expansion/Discretionary Incentives
   While certain tax credits are “as-of-right,” meaning they are much more “by the book,” other tax credits are known as “discretionary.” Discretionary incentives, such as commercial expansion or renewal, require a case-by-case analysis, customized for a particular city or project with approval of a designated public agency.

   Tax credits become available for commercial expansion when a company makes a future investment in property through an enterprise zone, job creation credits or training grants. Because states and local municipalities operate independently, it is difficult to understand the value of available programs, complex requirements and any potential pitfalls.

To find all of the tax credits available to your company, it’s a best practice to partner with a tax incentives expert that has years of experience in this field. When you have the right guidance, you can maximize your tax savings to improve your company’s bottom line.

Ready to discover beneficial tax credits for your company? Call 866-444-4880 or click here to speak directly with an experienced tax expert at Corporate Tax Incentives.