Tax Laws - Pay to Save

If you're an owner or plan to purchase an electric vehicle or plug-in, the new tax laws around green vehicle technology have your interest peaked.

As states try to compensate for the lost revenue generated by the gas tax, new charges for these environmentally-friendly vehicles are increasing.  In 8 states, we will see higher registration fees, and in most U.S states, a special fee will be imposed on gas-free cars, trucks, and SUV's.  As the popularity around green technology increases, the need to update the infrastructure of the nation to accommodate these trendy cars is increasing.  

While plug-in hybrid and electric vehicle owners represent a small percentage of new vehicle sales in past years, in this new decade, the rate is expected to rise substantially. States are doing their best to figure out what's a reasonable fee, and that's no easy equation.  

Incentives to buy electric had been supported in many states and by the Federal government too.  Those tax credits are slowly being eliminated for some of the leading models, most notably made by Tesla and General Motors.  Not only are tax credits fading, but some states are also finding creative ways to enact fees that will help off-set the gas-tax loss.  In Illinois, for example, up until now, the license plate fee for buying electric was a mere $35 compared to the almost $100 cost for gas motorized vehicles.  This registration fee is increasing to $148 plus and a separate additional $100 fee in place of the gas-tax.  Other states are following suit.  In Alabama, a new $200 fee on electric vehicles and $100 fee on plug-in' will help update roads and bridges. At the same time, a smaller portion will go towards providing the necessary installation of charging stations to accommodate this newer technology. 

It may come as a bit of shock when seeing these increases in black and white; however, States are just attempting to figure it all out, and the impact of these hikes, in many cases, are lower than what you'd typically pay in fuel-taxes.

Some view these new tax laws as a way to discourage going electric, to plan for the future, we need to evolve from the taxes of the past.

The Secret Power of Tax Credits

If you own a small business that’s had good success, you may feel ready to take it to the next level and expand. However, feeling ready and actually being ready are two totally different things; if you don’t have the money to grow your business, it can feel impossible to make expansion happen or like it will take years and years.   

Thankfully, there are small business incentives, such as state credits, federal credits, grants, and more that can make your dream a reality. The trick is just to find the right one for your specific needs and circumstances.

Tax Credits

There are many tax credits that exist to help businesses. Typically, these credits are available to businesses that meet very specific requirements and/or have very specific needs. Thus, it can take a little searching to determine which credits you can apply for.

One great example is the federal Work Opportunity Tax Credit. You can receive this credit for hiring specific “high risk” employees or others who have a lower chance of getting hired elsewhere, such as former felons or those who fall below a certain level on the poverty line. Typically, you can claim as much as $9,600 for each qualifying employee you hire, though there is a limit on the number you can hire and receive the credit for.

There are many credits that, like the Work Opportunity Tax Credit, you can easily become eligible for if you just make a few small changes, and more often than not, these changes are very worth the pay-off.

State Hiring Incentives

Another good way to get extra cash for growing your business is to take advantage of state hiring incentives. Incentives are typically offered based on how many jobs your company can create in your community or other ways in which it can help the community; the more jobs and opportunities you can create, the better.

When you help out and help better your community, everybody wins, and your business is the one that gets the big “thank you” in the end.

Grants

State and federal grants are also a good way to generate money for your business. If you plan on training your employees to do something new, or on offering some kind of new product or service that would help the community, you can typically find a relevant grant that will reimburse you for some or all of your related expenses or at least for specific costs.

You can learn about available grants and determine which ones could apply to you by contacting the United States Department of Labor’s Business Relations Group, as well as other grant-offering resources.

As you can see, there are a great many ways to help your business earn more money, or, at the very least, to cover some of its costs so that you can designate those funds to expansion. Many of these resources can also help your business to make a positive difference in the community; so really, these types of incentives are a powerful win-win option for everyone involved.

What You Need to Know about the American Tax Credit

If you’re thinking about heading to school or if you’re sending a child off to college, you need to know about the American opportunity tax credit. This credit is good for students who pay taxes and can help them to supplement the high cost of a college education. The credit reduces the taxes owed based on the amount of money spent So, the more one spends on college, the higher the credit.

Eligibility Requirements

As with most credits, there are strict eligibility requirements that must be met in order to receive this credit. They include:

l  The student must not have completed four years of schooling.

l  The student must be enrolled in college for at least one semester during the tax year.

l  The student must meet the college’s eligibility requirements for part-time enrollment.

l  The program in which the student is enrolled must end in a degree or certificate.

l  The student must not have ever been convicted of a drug related crime.

l  The person applying for the credit must be paying some or all of the educational tuition and fees.

l  The student must be enrolled in a qualifying college or post-secondary school.

The American Opportunity Credit and Financial Aid

Most students will receive some type of financial aid to help fund their education. This may include loans, scholarships, grants, and aid offered by the institution itself. The good news is that any borrowed funds can be counted toward the credit since they will eventually have to be repaid. However, aid that does not have to be repaid does not count toward the credit.

Dependents

Each eligible student is entitled to receive one tax credit and no more. For parents who are claiming the credit on behalf of dependent’s expenses, the same credit must be used for both dependents.

Obviously, there are a lot of rules and requirements for obtaining this tax credit. However, the credit is substantial and well worth the effort put in. While it is possible to fill out the tax credit forms on one’s own, most people find it a lot easier to do with the help of a qualified accountant.