The C-corporation tax return deadline is right around the corner and while your company is getting everything in order for April 15th, there are a few things you might want to consider before completing your 2020 tax return.
With recent changes to tax codes and ongoing developments in the business world, your company may apply for hidden tax incentives and deductions you’re unaware of. Here at National Tax Group, we let businesses in on our tax secrets and help them take advantage of potential tax savings.
Our tax services help save businesses thousands of dollars a year, but how exactly do we do this? Here are a few of our tax secrets that your company may be missing out on.
Your Businesses Can Receive Rewards For Its Risks
Since 1981, the US government has been rewarding businesses who take risks and undergo innovative research and development with tax credits in hopes that this will create economic growth both state and nationwide.
These credits don’t just apply to lab work or large and extensive projects either. In fact, R&D credits apply to most industries. As long as your company is improving the quality, function, or reliability of a process or product, identifies uncertainty in a process or product, uses a systematic process, and is technological in nature, you can apply for these credits.
If you feel your company has been involved with research and development that can qualify for these tax credits, our tax team can help. We can walk you through what you’ll need in order to properly claim these benefits as well as make sure you are specifying items correctly on your claim.
If Your Business Goes Green, It Can Save Green
Any properties that have experienced renovations or new construction that involve the installation of energy-efficient elements are actually eligible for tax deductions under the 179D tax incentive. This incentive, which was formally a year-to-year policy passed by Congress, was made permanent leading the way for more green development across the US.
This tax provision allows properties, both new and old, to receive a tax deduction of $1.80 per square foot that would be considered energy-efficient. This can include improvements to hot water systems, building envelope systems, HVAC systems, interior lighting systems, or insulation in ceilings, walls, floors, and roofs.
Breaking down what elements of your property apply for these deductions can be a complicated process and hiring a team of skilled tax professionals will not only make the process easier but will also save you the most on your return.
Your Property Might Be Sitting On Untapped Capital
Another lucrative but oftentimes missed opportunity is achieved through cost segregation. This tax tool allows you to increase your tax deductions by decreasing the depreciation years of your property. Normally, commercial buildings are depreciated over a 39 year period. With cost segregation, you can bring that depreciated time down to 15, 7 or even 5 years.
To apply this to your property, a cost segregation study would need to be completed. National Tax Group has performed studies for nearly every industry, in all 50 states and has helped save clients millions in taxes.
Green Construction Can Lead To Tax Credits
Any builder or contractor who has built single-family homes or low-rise residential buildings that have reduced energy consumption by 50% can apply for tax credits under 45L. These tax credits allow builders and contractors to obtain up to $2,000 for each unit they construct that qualifies for energy-efficient standards.
These qualifying project standards include buildings that are three stories or less above ground (not including below-grade parking,) built on the territory of the US, meet construction standards based on those set by the 2006 International Energy Conservation Code (IECC,) completed between August 8, 2005 and December 31, 2020, and can include “substantial” rehabilitation and reconstruction.
Documentation of installments before any construction is underway must be applied by builders and contractors in order to receive these benefits.
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If you think you or your company may apply for any of the above tax benefits and savings, give us a call at (561)-257-3436 so you can make the most out of your 2020 tax savings.