The new year means you get to set new goals for your business. It also means that you will have to pay taxes on the money your business earned in 2019. The tax credits and deductions change slightly each year, so it is a good idea to review this year’s tax policies when you are making plans for your business activities for the new year. If you are planning to start a new business this year, or if you need advice on how to implement the business strategies that will reduce your tax burden, contact an Alabama business law attorney.
The Enterprise Zone Credit or Exemption
This is a series of initiatives designed to encourage businesses to set up shop in economically disadvantaged areas in Alabama. Doing so will create job opportunities for local residents and bring in money from customers who buy from the business. Some of the rewards you get are five years of exemption from some or all of your business taxes, as well as a tax credit of $2,500 for each permanent employee you hire. You must comply with a complex set of requirements to get this exemption. If you plan to open a new location for your business in 2020, it pays to do it in a part of Alabama where the governor wants to encourage business and create jobs; it also pays to work with a lawyer to make sure you meet the requirements and don’t miss out on the tax credits.
Basic Skills Education Credit
If your company sponsors educational programs for your employees, you can get a tax credit equivalent to 20 percent of the actual cost of the program. It only applies to basic skills education, which is what someone would learn at a high school or vocational school; it also includes English as a second language instruction. It does not include highly specialized professional training, such as if you operate a school and pay for the teachers to get master’s degrees.
Full Employment Act of 2011
An increasing number of Americans rely on gigs as their main source of income, as full-time employment becomes scarce. Alabama offers a tax credit to encourage businesses to hire employees on a full-time basis. You can get a $1,000 tax credit for each job you create; you can only get it once per job position, and you are eligible for it in the year in which the first employee to fill that job for a whole year completes 365 consecutive days of employment.
Veterans Employment Act
You can get this tax credit for employing combat veterans or unemployed veterans and paying them at least $14 per hour. The tax credit is a one-time credit of $2,000. If it is a newly created job position, it is possible to claim the $1,000 Full Employment Act credit and the $2,000 Veterans Employment Act credit for the same employee.
Let Us Help You Today
Small businesses are essential to Alabama’s future, and a small business attorney can help you avoid costly mistakes. Contact the Alabama business litigation & corporate law attorneys at Cloud Willis & Ellis for a consultation.