Businesses pay thousands, if not millions, of dollars in taxes each year. Fortunately, they can reduce some of their tax bills by claiming credits on their returns. To find the tax credits that a business is eligible for, they should hire a Texas tax credit services company like Business Name to find tax credits.
Understanding Credits and Deductions
To reduce their taxes, businesses can take tax credits and deductions. Although they both lower their taxes, they don’t do so in the same way. A tax credit reduces how much the business owes, but a tax deduction reduces their taxable income.
While the credit comes directly off the company’s bottom line when filing their taxes, deductions reduce the amount of the taxable income used to calculate what they owe. This amount can also lower the rate a business gets charged for its taxes.
Finding Tax Credits
If a technology business is small, or they haven’t retained a tax professional for their company, they can hire a Texas tax credit services company to find eligible credits to reduce their taxes. For technology companies, a well-known credit is the R&D (research and development) tax credit.
The R&D credit allows a business to take up to $250,000 off their tax bill by claiming expenses for research and development. By hiring a Texas tax credit services company, a business will keep up to date on tax credits and other changes that affect their bottom line.
