5 Michigan Small Business Tax Benefits You Might Not Know – Need help? Contact ATS Advisors
As a small business owner in Michigan, navigating the tax landscape can be overwhelming. But fear not! There are several tax benefits and write-offs available to you that you might not be aware of. Let’s dive into five of these gems:
- Federal Section 179 Deduction: This deduction allowed small businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. It was a boon for businesses looking to invest in growth while reducing their tax burden.
- Michigan Small Business Tax Credit: Michigan offers a Small Business Alternative Credit for certain small businesses. This credit provides relief by reducing the Michigan Business Tax (MBT) liability for qualifying small businesses.
- Federal Research and Development Tax Credit: Small businesses engaging in qualified research activities may be eligible for this federal tax credit. It’s designed to encourage innovation and growth by providing a credit for a percentage of qualified research expenses.
- Michigan Net Operating Loss (NOL) Carryforward: If your business experienced a net operating loss in Michigan, you can carry that loss forward to offset future taxable income. This provision helps businesses weather tough times and stay afloat during periods of financial difficulty.
- Federal Qualified Business Income Deduction (QBI): The QBI deduction allows eligible small businesses to deduct up to 20% of their qualified business income from partnerships, S corporations, sole proprietorships, and certain trusts and estates. This deduction can result in significant tax savings for qualifying businesses.
These tax benefits and deductions can make a meaningful difference for small businesses in Michigan, providing much-needed relief and incentivizing growth and innovation. However, it’s important to consult with a tax professional to ensure that you’re taking full advantage of all available opportunities and complying with relevant tax laws and regulations.
In conclusion, while taxes may never be a small business owner’s favorite topic, knowing about and leveraging these tax benefits can lighten the burden and help your business thrive in the Great Lakes State.