27 Business Tax Credits from the IRS

PLANNING FOR 2010

The Internal Revenue Service (IRS) may have a wonderful Christmas gift for your business this holiday season: a tax credit. Tax credits come in handy as they are subtracted from the taxes you owe, effectively reducing your overall tax burden. However, unlike most gifts bestowed you have to look for them yourself.

IRS Form 3800

IRS Form 3800 (General Business Credit) is worth exploring as it gives businesses credits for a wide variety of reasons including making your facility accessible to the handicapped; for increasing your research activities; for using biodiesel and/or renewable diesel fuels; credits for your business’ contribution to select community development corporations; purchase of energy efficient appliances; the list goes on.

According to the IRS, “Your general business credit for the year consists of your carry forward of business credits from prior years plus the total of your current year business credits. In addition, your general business credit for the current year may be increased later by the carry back of business credits from later years. You subtract this credit directly from your tax.”

Reduce Your Tax Burden

You can carry back by one year or you can carry your credit forward for as many as 20 years. As your business grows and becomes more profitable, those tax credits can reduce your overall federal tax burden for many years to come.

So exactly what is covered by the IRS? Plenty, actually. The following are the current tax credits and the forms you should obtain in addition to including Form 3800 with your tax return:

• Form 3468, Investment Credit
  This consists of the sum of the rehabilitation, energy, and reforestation credits.
• Form 5735, American Samoa Economic Development Credit
• Form 5884, Work Opportunity Credit
• Form 6478, Credit for Alcohol Used as Fuel
• Form 6765, Credit for Increasing Research Activities
• Form 8586, Low-Income Housing Credit
• Form 8611, Recapture of Low-Income Housing Credit
• Form 8820, Orphan Drug Credit
• Form 8826, Disabled Access Credit
• Form 8834, Qualified Electric Vehicle Credit
• Form 8835, Renewable Electricity Production Credit
• Form 8844, Empowerment Zone Employment Credit
• Form 8845, Indian Employment Credit
• Form 8846, Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips
• Form 8847, Credit for Contributions to Selected Community Development Corporations
• Form 8864, Biodiesel and Renewable Diesel Fuels Credit
• Form 8874, New Markets Credit
• Form 8881, Credit for Small Employer Pension Plan Startup Costs
• Form 8882, Credit for Employer-Provided Childcare Facilities and Services
• Form 8896, Low Sulfur Diesel Fuel Production Credit
• Form 8900, Qualified Railroad Track Maintenance Credit
• Form 8906, Distilled Spirits Credit
• Form 8907, Nonconventional Source Fuel Credit
• Form 8908, Energy Efficient Home Credit
• Form 8910, Alternative Motor Vehicle Credit
• Form 8911, Alternative Fuel Vehicle Refueling Property Credit
• Form 8923, Mine Rescue Team Training Credit

Your accountant is probably aware of all of these credits, but at least you have a list to help you look for ways to reduce your overall tax burden before the year comes to a close.

Source: IRS