Getting tax breaks can make a big difference for granite shops, helping you save money and grow your business. The government offers ways to lower your taxes if you invest in your shop, hire people, or go green.
In this post, we’ll give you some insights that you might use to take advantage of the opportunities offered and use the money to invest in your business.
Grab a coffee, and let’s start!
1. Use Energy-Saving Equipment
The government gives tax breaks to businesses that use energy-efficient equipment. If your shop buys machines, lights, or heating/cooling systems that save energy, you might get some money back on your taxes. Programs like the Energy Efficient Commercial Buildings Deduction and the Investment Tax Credit can help.
Building owners who increase energy efficiency in building systems by at least 25% may be able to claim a tax deduction. IRS official website Site Index Search | Internal Revenue Service brings up information about the Energy Efficient Commercial Buildings Deduction.
What to Do:
Check if your shop is wasting energy – machines and equipment turned on or in a standby state, if you use electric heating or AC, check their efficiency and contact with open doors or external environment, among other actions.
Get energy-saving equipment or systems.
Keep receipts and documents to prove your purchases.
The Department of Energy (DOE) offers guidance on energy-efficient technologies and projects that can qualify for deductions. You can visit their website here.
2. Use the Section 179 Tax Rule
The Section 179 Tax Rule enables businesses to deduct the full purchase price of equipment and software that qualifies (according to the rule) in the year they buy it, instead of depreciating it over several years. This can be a huge tax benefit for businesses investing in new tools and technology that they need to grow.
What to Do:
Make sure the equipment you buy qualifies – stone-cutting machines, polishing tools, fabrication equipment, large vehicles, office equipment, etc.
Plan your big purchases before the end of the year, since you can only apply for the same year. Be sure they don’t get over the maximum deduction limit.
Talk to a tax expert to get it right.
And since we’re talking about technology, check out this blog post to know more about the problems of using multiple software, and why an all-in-one software is the solution.
If you want to know more, check out Section 179’s website Section179.Org – The Official Website of Section 179 or IRS official website.
3. Get a Tax Break for Innovation
If your shop is trying out new ways to cut stone, make designs, or improve how things are done, you might qualify for the Research and Development (R&D) Tax Credit – which rewards businesses for trying new ideas.
It is a federal incentive designed to reward businesses for investing in innovation and improving their processes, products, or technologies. It’s particularly useful for industries like granite fabrication, where experimenting with new techniques or equipment is common.
If you want to know more about the R&D Tax Credit, search for Form 6765 (Credit for Increasing Research Activities) at IRS’s official website.
What to Do:
Keep detailed records of projects, expenses, and time spent on R&D activities. Use project logs, invoices, and payroll records to back your claims.
Ask a tax expert if your work qualifies or what you must do to make it eligible.
4. Look for Local Tax Breaks
Some states and cities give extra tax breaks for businesses.
Examples could include lower property taxes for buildings and operations within certain zones, no sales tax on certain types of machinery that can include stone-cutting or polishing equipment, and even credits for training and qualifying workers.
What to Do:
Find out what your state or city offers.
Stay updated on local tax programs.
In order to find out what your state or city offers, you have several options: check with local Business Development Centers, visit your State or City’s Economic Development Website, contact your Chamber of Commerce, and even attend local Business Seminars and Workshops.
Last but not least, you can contact your tax expert to see what hints he can give you.
5. Go Green
If your shop recycles water, reuses waste materials, or does other eco-friendly things, you could get tax breaks for being sustainable. Installing water recycling systems, sparing energy, and using granite scraps (remnants and partial slabs) are examples of actions you can take.
SlabWare can help you organize your remnants to sell them or even use them in your Drawings and projects. You can learn more about it by clicking on this link.
Some programs even give grants or certifications. If you want to know more about them, try looking into ISO 14001 Certification, LEED Certification (Leadership in Energy and Environmental Design), and Green Business Certification (check it in your municipality or State).
What to Do:
Invest in tools or systems that help you recycle or go green.
Apply for programs that certify your shop as eco-friendly.
If you’re interested in how your and your worker’s mistakes can interfere with your wastage and your costs, check out this blog on the worst 7 mistakes countertop installers make.
Track what you do to help the environment and report it to your tax expert to receive guidance.
6. Hire Certain Workers
If you hire workers from certain backgrounds who face difficulties and barriers to employment, you can get the Work Opportunity Tax Credit (WOTC) – which lowers your taxes for every qualified person you employ. The amount of the credit varies based on the employee’s target group, hours worked, and wages earned.
The WOTC provides tax credits for hiring individuals from the following categories: veterans (particularly those who have work-connected disabilities), long-term unemployed (27 weeks or more), ex-felons, recipients of public assistance (in the last 18 months) or Supplemental Security Income (SSI), Vocational Rehabilitation Referrals, among other qualified groups.
The best way to refer workers who qualify your business to WOTC is to check it out with a job agency or recruitment agency.
What to Do:
Work with job agencies to find qualified workers.
Fill out IRS Form 8850 when you hire them. Check out the IRS’s website to search for more information.
Wrap-Up
Tax breaks are a great way to save money and grow your granite shop. By upgrading your tools, hiring smart, and being eco-friendly, you can lower your tax bill and reinvest in your business. Talk to a tax professional and start taking advantage of these opportunities today!
As shown in this blog post, SlabWare can help your business grow simply by helping you organize your processes and clean up the mess in your schedule. Avoid time wastage and cut costs by using a tool designed for the work you do!
Start a free trial now, or contact our team to learn more.