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TAX TALK: 2 Extended Credits Can Save Businesses Taxes on 2015 Returns

Posted by Hal Zemel, CPA, J.D., LL.M. on Jan 11, 2016 8:00:00 AM
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The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) extended a wide variety of tax breaks, in some cases making them permanent, that can save you taxes on your 2015 business returns.

Extended breaks include many tax credits — which are particularly valuable because they reduce taxes dollar-for-dollar in contrast to deductions, for example, which reduce only the amount of income that’s taxed.

Two extended credits that can save businesses taxes on 2015 returns include:

  1. The research credit. This credit (also commonly referred to as the “research and development” or “research and experimentation” credit) has been made permanent. It rewards businesses that increase their investments in research. The credit, generally equal to a portion of qualified research expenses, is complicated to calculate, but the tax savings can be substantial. If you spend money on R&D each year, you should investigate this credit.
  2. The Work Opportunity credit. This credit has been extended through 2019. It’s available for hiring from certain disadvantaged groups, such as food stamp recipients, ex-felons, and veterans who’ve been unemployed for four weeks or more. The maximum credit ranges from $2,400 for most groups to $9,600 for disabled veterans who’ve been unemployed for six months or more.

Want to know if you might qualify for either of these credits? Or what other breaks extended by the PATH Act could save taxes on your 2015 return? Contact me at hzemel@berdonllp.com or your Berdon advisor.

Hal Zemel, a Tax Principal at Berdon LLP, has more than 20 years of experience in public accounting and advises businesses in the real estate, service, and manufacturing sectors.

Topics: TAX TALK

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