The Tax Increase Prevention Act of 2014 (TIPA) extended through December 31, 2014, a wide variety of tax breaks, including many tax credits — which are particularly valuable because they reduce taxes dollar-for-dollar. Here are three credits that your business may benefit from when you file your 2014 return:
1. The research credit. This credit (also commonly referred to as the “research and development” or “research and experimentation” credit) 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.
2. The Work Opportunity credit. This credit is 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.
3. The Sec. 45L energy-efficient new home credit. An eligible construction contractor can claim a credit for each qualified new energy efficient home that the contractor built and that was acquired by a person from the contractor for use as a residence during 2014. The credit equals either $1,000 or $2,000 per unit depending on the projected level of energy consumption.
To learn whether you qualify for these - or other tax credits extended by TIPA - please contact your Frazer LLP tax advisor in Brea, 714.990.1040, or Visalia, 559.732.4135.