Looking for good news about your future income taxes? As a business owner, you probably won’t find a whole lot at first glance. 2013 and 2014 have brought new taxes, tax rate increases, and the reduction or elimination of some valuable incentives for small businesses. But don’t lose heart. While it is certainly possible that your taxes might go up, it’s also possible that you’ve previously overlooked some valuable incentives that could offset or even outweigh the coming tax hikes.
Recent changes in the tax law make knowledge of opportunities and effective tax planning essential for all business owners. If you don’t want to find yourself on the wrong side of a frightening tax bill, you had better know the law and find the right opportunities. Here are two areas of opportunity and one big pitfall to avoid in 2014.
Changes have made general business credits more valuable than ever
General business credits have always been an important tool for businesses. But for the last few years, their importance for many small businesses was diminished. Reduced individual income tax rates coupled with the effects of alternative minimum tax (AMT) turned many general business credits into paper tigers – you could qualify for them, but in many cases you couldn’t actually utilize them.
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