Companies in California and elsewhere are on the lookout for ways to save money during these tight economic times. One fantastic way to cut costs is to take advantage of the corporate tax credits available to California companies from both the state and federal governments. Although these tax incentives add up to a large reduction in many businesses’ taxes, unfortunately many companies are unaware of them and fail to take advantage of them. This can be remedied by working with a California corporate tax credits specialist now, instead of waiting until next April when it may be too late. Your tax credit CPA will have the information you need about California tax incentives that your corporation can use now to save on your tax bill.
One aspect of corporate tax planning that a CPA knowledgeable with these corporate tax credits can help with is to determine your company’s eligibility for Enterprise Zone credits and vehicle tax incentives. The state of California has forty-two Enterprise Zones, which are areas in the state that have been identified as being economically challenged. Because of this, the state encourages companies to set up businesses in these zones and hire people living there to improve the local economy. When companies do this, they can then benefit from the numerous California tax incentives and Enterprise Zone credits available. These include corporate tax credits for hiring people who are in certain designated groups. They typically are on public assistance or are veterans, but certain categories of youth and others also qualify. If your corporation hires one of these people who live in the Enterprise Zone and are in one of these specially designated groups, your company may receive up to $13,000 per qualified employee annually as corporate credits. In some cases, businesses with qualifying employees may file amended returns to gain these corporate tax incentives for up to three years previously, or carry them over to next year if that is needed.
Your corporation may also qualify for tax when it helps to take care of the environment. Companies that install power-generating equipment that relies on solar, geothermal and other renewable resources may qualify for tax breaks. If your company adds on pollution control and energy control equipment to its setup, you may also receive tax credits for doing this. Using alternative fuel vehicles also qualifies.
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