Tax season is upon us once again, and it’s time to think about maximizing tax credits. It’s also the perfect time to start considering how to maximize your savings for the current tax year. If you want to improve your tax savings strategies, here is some information about how ASAP Payroll, with the help of iSolved software, can help you reduce your annual liability.
Understanding Tax Credits
People may think of tax deductions and tax credits as interchangeable terms, but they are not the same. A tax deduction reduces the amount of an organization or individual’s taxable income.
For example, if you take deductions totaling up to $10,000 off an individual’s income taxes, it might result in a reduction in the taxes they owe the IRS by around $1,000 or less. However, if you receive a tax credit for $5,000, it means you’ll receive a $5,000 deduction on the amount of taxes owed. If used correctly, tax credits can be a great tool for reducing the amount you owe the IRS.
There are a wide range of tax credits available that business owners might not be aware of. Many employers may qualify for the federal Work Opportunity Tax Credit, for example. This tax credit reduces the tax burden for hiring employees who meet certain qualifications, such as certain veterans, ex-felons, food stamp (SNAP) recipients, residents in rural counties or Empowerment Zones, and many others. Tax credits are also available for qualified research and development, employer-provided child care, clean vehicles, family and medical leave, and many other areas.
ASAP’s Role in Tax Management
ASAP Payroll provides a tax management service to help businesses comply with tax laws and file taxes, with the help of iSolved’s software.. Employment tax credits can be extremely complicated, so many businesses don’t take advantage of the ones they’re eligible for. iSolved tax services can fill this gap with their department of Tax experts. They research, apply for, and recoup valuable employment tax credits for small, medium, and large businesses.
Features of iSolved for Tax Credits
iSolved has recouped millions of dollars in tax credits for its clients. The company serves a broad range of industries, including healthcare, manufacturing, hospitality, construction, retail, and financial services. The iSolved platform can be integrated with your current accounting services to create a more streamlined process. Tax credit calculations can be automated, along with ongoing eligibility assessments, to make sure you qualify for as many credits as possible at the end of each fiscal year.
Benefits of Using iSolved During Tax Season
Tax credits aren’t just available at the federal level. You can also apply for and take advantage of tax credits at the state level in many cases.
iSolved pursues tax credits for every type of business in all 50 states. They also stay on top of regulatory and legal changes that can impact your eligibility. If you own a multi-state business, we won’t let any of those potential tax credits slip through the cracks.
When many companies had difficulty managing their reporting requirements under the Paycheck Protection Program (PPP), iSolved was there for them with tax and reporting solutions.
Practical Tips for Maximizing Tax Credits
Applying for tax credits requires meticulous recordkeeping. Improper recordkeeping can result in an IRS audit or the cancellation of your claim for a tax credit.
Employee wage documentation, which includes W-2 forms, timesheets, and your payroll register, needs to be accurate and up-to-date when applying for many tax credits.
Invoices, contracts, general ledger entries, and lease agreements may also be required when applying. Switching to a cloud-based human capital management (HCM) system is one of the best ways that you can track records for reporting purposes and stay in compliance when applying for tax credits.
Get Started for Tax Season
Your existing HR and employment data can all be mapped directly to our system. Workflows can then be configured to automate many different processes, including timekeeping, payroll, benefits administration, and also tax credit services. Your account manager can help you identify the best configuration methods for your company, based on size, complexity, and industry. You also receive first-rate customer and technical support and training to use the system.
Conclusion
Effective tax credit management can lead to significant savings, surpassing simple deductions. The process requires careful attention, but with iSolved, it’s much more manageable. Contact ASAP Payroll to explore how iSolved can streamline your tax season preparations. Schedule a demo today and see how you can maximize your tax credits and reduce your tax liabilities efficiently.
