When we talk to potential clients, sometimes they ask us why a tax credit specialist is something they need. It is a great question. After all, they are usually already paying for a CPA and this is just an added financial expense. What we tell them is that a tax credit specialist is something completely different.
How is a tax credit specialist different from a CPA?
We did a whole post about the difference between a tax credit specialist and a CPA and you can read it here. The short answer is that while a CPA has a broad understanding of the tax code and knows more than enough to file your taxes with the IRS, a tax credit specialist has a very specialized understanding of the tax code.
Tax credit specialists are focused on the sections of the tax code that deal with tax credits and they understand them word for word.
Why haven’t I heard of a tax credit specialist until now?
Odds are if you are reading this article, someone mentioned that you might benefit from a tax credit specialist and you Googled it to find out more.
The truth is that not every business qualifies for tax credits, but many businesses do and do not even realize it.
Does your business employ veterans, ex-felons, or persons with disabilities? Does your business conduct research? Does your business offer a health plan or retirement plan to your employees? These are all business expenses that can qualify for tax credits, but many businesses do not know that the credits are available. Usually, it requires a tax credit specialist to fill them in on what they are missing.
What is the benefit of hiring a tax credit specialist?
Most CPA’s will be able to tell you about small savings within your taxes. However, the tax code is immense. We’re talking thousands of pages, though exactly how many thousands is up for debate. No matter the answer, it is too much for any individual to know everything about. That is why there are specialists.
Specialists are people who focus on specific parts of the tax code and become experts in those specific parts. We just happen to be specialists in the tax credits part of the tax code. That means we know the ways you can and cannot save money through the use of tax credits. Through the years, we have figured out some tricks of the trade to make sure businesses are maximizing the benefits of those tax credits.
Our goal, first and foremost, is to discover as many ways as possible for you to earn credits that will directly offset the amount you owe on your taxes.
Why can’t I figure out the tax credits myself?
Figuring out which tax credits your business qualifies for and applying for them is certainly something you can do yourself. However, be warned that there are a lot of hoops the IRS wants a company to jump through to get a tax credit.
There are forms to be filled out, information to be gathered, and separate deadlines to meet. For something like the Electric Vehicle Tax Credit, the requirements to qualify are constantly changing and you have to be updated on those changes.
In other words, there is a lot of research and a lot of time that goes into applying for tax credits and there’s always the possibility that after all of that, the IRS will reject your claim. We have seen seasoned tax professionals struggle with learning about all the tax credits available and how to apply for those credits.
What if my company already operates at a loss?
Even if your company is losing money this year, it is still important to take tax credits if possible. There are a couple of reasons for this.
First, some tax credits are what is called refundable. That means if you have a credit and you owe zero dollars in taxes, the money left over will be refunded to you.
Second, some tax credits can be carried over from one year to the next. That means that even if you are operating at a loss this year, the tax credit could be used to offset any taxes your business owes next year.
If you still are not sure if you need a tax credit specialist, contact us here at Tax Credit Group. We will take a look at your situation and tell you if there is or is not savings that you can benefit from.