Connect with us

Hi, what are you looking for?


2023 Tax Changes That Could Boost Small Business Growth

Small Businesses [Photo: Harvard Business Review]
Small Businesses [Photo: Harvard Business Review]

The 2023 tax season yet again brings new changes to small business owners this year. In this article, read and find out how these tax changes can boost the growth of small businesses!

Small Businesses [Photo: Triple Pundit]

Small Businesses [Photo: Triple Pundit]

The 2023 tax season yet again brings changes to the tax rules for small business owners. However, experts stated that what must never change is the need to keep accurate business records and work with trusted tax professionals. Certified Public Accountant David Levi stated that small business owners must not view keeping their financial records as the last thing they must do, as reported by Murphy.

READ ALSO: Up To $30,000 Tax Rebates Issued By Duke Energy Company In North Carolina

Employee Retention Tax Credit

The Employee Retention Tax Credit (ERTC) was intended to encourage small business owners to retain their employees despite the COVID-19  pandemic era. However, these tax credits were applied to wages that were paid only before October 1, 2021. Therefore, these tax credits cannot be claimed on 2022 tax returns anymore. 

Fortunately, there is still time to amend the 2020 and 2021 tax returns to be able to claim the ERTC. This is because tax returns can generally be amended within three years after filing tax returns. An employer may still be eligible for the ERTC if their business was ordered to permanently or temporarily shut down in 2020 or 2021. They may also be eligible if their revenue decreased by more than 50% in 2020 or more than 20% in 2021 compared to 2019’s revenues. When the ERTC was still effective, each employee can reportedly claim up to $7,000 per quarter. 

Retirement Plan for Employees

According to Uzialko, small businesses with up to 50 employees can now claim a tax credit of up to $5,000. This amount is 100% of the cost of starting a retirement plan. In addition, small businesses can also claim a tax credit of up to $1,000 in employer contributions for each employee’s plan. Unfortunately, the tax credit for small businesses with 51 to 100 employees has already ended. 

Tax and Energy-Efficient Renovation 

According to an article on the U.S. General Services Administration, the Inflation Reduction Act included many tax credits and tax deductions for businesses. The amount of the Energy-Efficient Commercial Buildings Deduction now allows small businesses to claim larger deductions for their renovations. In addition, small businesses can claim a tax credit of up to $7,500 once they purchase small electric vehicles. For vehicles heavier than 14,000 pounds, the tax credit can reach up to $40,000.

READ ALSO: Social Security Benefits: Who Will Receive Them When Beneficiaries Die?

Click to comment

Leave a Reply

Your email address will not be published.