What are Common Tax Credits That Small Business Owners Overlook? 

If you are running a small business, you need to save money on business expenses as you would require a lot of investments. It is thus essential for small businesses to know what some of the tax credits are for them and how they can take advantage of such tax credits. Small businesses try to save their taxes, but there are some tax credits that they commonly overlook, and thus, in this article, we will discuss what are some of the essential benefits they can avail from tax credits in Houston. 

You can consult any tax consultant in Houston, TX, who can provide you with detailed information about the tax credits and how you can use them for your business. 

What is the tax credit, and how does it differ from tax deductions? 

Business owners often get confused about the tax credits and tax deductions. In some cases, there are business owners who focus merely on tax deductions and avoid tax credits. A tax deduction reduces the taxable income; however, a tax credit reduces the amount of tax owed by giving a dollar-for-dollar reduction of your liability. 

What are Common Tax Credits That Small Business Owners Overlook? 

  • Work Opportunity Tax Credit (WOTC): This tax credit is given to businesses that hire individuals who are facing employment issues. If there are individuals who have been unemployed for a long time, and you are providing employment to them, then you will get a tax credit in this case. Some other examples would be temporary employment for needy people, ex-felons, or other such veterans. 
  • Tax Credit for Research and Development: This tax credit is available for promoting research and development in the industries. It is available for businesses of all sizes, and if there is research on software, architecture, or other things, it will be beneficial for the companies to receive tax credits. 
  • Tax Relief for Natural Disasters: For small businesses, there is natural disaster tax relief to assist them during natural disasters. There are some instances in which businesses are affected by natural disasters, so to help them, there is a tax credit for the businesses.  

So, these are some of the critical tax credits available for small businesses. You can get guidance from the tax consultants who can provide more information about the tax credits that you can avail.