Tax credits and deductions help organizations save cash and keep more of their revenue invested in their business. The challenge for taxpayers is knowing what tax incentives exist and how they can qualify.
Reducing your organization’s tax liability is a valuable tax planning strategy that directly impacts your bottom line and increases cash flow. The benefits of the many available tax credits and deductions for business owners can be substantial. However, it can be confusing to know what you qualify for and how to claim the correct amount. This confusion prevents many businesses from maximizing their tax saving opportunities.
The U.S. government, and many states, offer a variety of tax incentives for organizations to benefit from. Don’t leave money on the table by not claiming those you qualify for.
These tax incentives include:
The Inflation Reduction Act enhanced existing energy efficiency incentives to encourage sustainable building projects. Because many of these incentives are uncapped, some estimate that the total incentives given could be up to $800 billion over the next ten years.
Starting in 2023, tax-exempt organizations can benefit from energy incentives in the Inflation Reduction Act. This includes hospitals, higher education, senior living, K-12 institutions and nonprofit organizations.
Forward-thinking businesses are increasingly embedding Environmental, Social and Governance (ESG) considerations into their tax strategy. As the government continues to incentivize sustainable and societally beneficial business practices, those who don’t include ESG and other sustainable initiatives in their tax strategy may be at a competitive disadvantage.
With the passing of the Inflation Reduction Act, more taxes, credits and other incentives were added to the Internal Revenue Code. Environmental incentives that businesses should consider include:
Partner with a trusted accounting and consulting firm to ensure that you maximize the potential of all tax credits and deductions, along with the proper accounting and compliance requirements. Eide Bailly is a reputable firm whose advisors are knowledgeable and experienced in business tax planning strategies to help organizations increase cash flow.
Our tax team is the number one accounting firm for energy efficiency incentives. We are supported by the National Tax Office who stay informed on legislative and tax code changes. We help clients across all industries with specialized, complex tax situations and make sure they benefit from all available tax savings opportunities. We save our clients millions of dollars in tax savings annually.
Besides deferring taxable income, the best thing about the cost segregation study process with Eide Bailly is that it’s seamless. I stay busy, and there’s no interruption in daily business, there’s no large time commitment required on my part, and it’s a totally seamless transaction. Anytime we purchase a commercial property, Eide Bailly is part of the process."
Eide Bailly came and helped us understand what could and what should go into our tax credits. The first year they did it with us, it was four times the size of our previous year’s tax credit."
"Eide Bailly's audit team has advance knowledge of 501(c)(3), non-for-profit organizations and tax credit project development, cost certification, complex tax returns, 990 and filing requirements. Native American Connections is a very complex organization. There are many CPA firms out there, but very few who have the knowledge, experience and understanding of cumbersome requirements and restrictions that apply to organizations such as ours, and who can accommodate complete services to meet these requirements and deadlines."
Eide Bailly understands our business. They provide us the standard audit and tax services, and from this information they've encouraged us to consider R&D tax credits. Because of their suggestion, we received tax refunds from prior years and tax savings for the current year. I appreciate that Eide Bailly always keeps our best interests in mind."
As a small business, we need every legitimate tax benefit that is available. The tax savings from the R&D credits that Eide Bailly helped us receive allow us to invest in new product development while keeping our profit margins at our targeted amounts."
"The tax deduction is the ultimate benefit of the 179D deduction, but the most substantive thing about going through the process with Eide Bailly was that they did all of the heavy lifting. I do construction, and that's where my time is most effectively applied. I'd prefer not to do accounting exercises. Eide Bailly was explicit in telling me exactly what they needed from me so I could be very efficient in getting information to them. Then they did all of the work so that I didn't have to take time away from my day-to-day duties."
The smaller CPA firms we have worked with previously have not been equipped to tackle opportunities or challenges we have faced. Eide Bailly has the resources and expertise to help us with the more complex issues that come up, and I'm happy we have them to face upcoming issues together."
See how Tige Boats utilized Eide Bailly’s R&D team for maximum benefit.
There are several types of tax credits and tax deductions businesses can claim. Each has a slightly different set of qualifications and benefits based on the type of project an organization is undertaking. Some available tax credits are permanent, while others expire and may be reinstated. The government also offers various tax credits for sectors such as education, energy efficiency and cybersecurity.
A tax credit is an incentive provided in the tax code. Tax credits directly reduce your tax liabilities and they provide an incentive for investing in a particular industry or activity. Businesses can claim both state and federal tax credits.
The difference between a tax credit and deduction can be confusing, leaving many people with questions. Tax credits reduce tax liability dollar for dollar, whereas tax deductions reduce taxable income.
Partner/National Tax Office Practice Leader
Partner/National Tax Office
Principal, Business Credits & Incentives
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