Finding Money & Increasing Profit Through Tax Credits · 2019-06-24 · LDCT 5 $3,500 Income Wait 1...
Transcript of Finding Money & Increasing Profit Through Tax Credits · 2019-06-24 · LDCT 5 $3,500 Income Wait 1...
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Finding Money & Increasing ProfitThrough Tax Credits
David McMillian, President
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Starting Point
Our Purpose: Help Business create new opportunities.
Business Activities create Tax Credit Opportunities. (Hiring, Training, Job Creation, Investment, Research & Development, etc.)
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Agenda
1. Tax Credit Background2. Key Federal Tax Credit Opportunities3. Key Georgia Tax Credit Opportunities4. Action Plan/Recommendations5. Q & A
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Greater than 80% of companies do not capture every tax credit opportunity.
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Why Tax Credits?
1. Economic Development
2. Awareness
3. Focus
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How are Tax Credits Designed?
• Activity – Training, Capital Expenditures, R&D, Hiring• May be limited by Industry
• Location– Located in Targeted Area for Economic Development
• Hybrid (Location & Activity)– Located in Targeted Area & Hire or Create Jobs, etc.
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Key Federal Tax Credit Opportunities
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Federal New Hire Tax Credit
• Work Opportunity Tax Credit– Up to $2,400 or up to $9,600 per new hire• 9+ Employee Target Groups
– Recipients of Foods Stamps, Unemployment Benefits, SSI Benefits, Temporary Assistance for Needy Families, Unemployed/Disabled Veterans, Felons, etc.
– Tax Credit based on Hours Worked & Wages Earned during first year of employment• Minimum 120 hours worked to be eligible.
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More than you Think
• Examples– 46 Million People on Food Stamps– 4+ Million People on TANF– 5.5 Million People on SSI Benefits– 500,000+ Unemployed Veterans
*USDA, Social Security, VA, Dept. of Labor
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New Hire Process
• New Hire Completes Digital/Manual Questionnaire – Most Companies handle during New Hire
Onboarding– New Hire Answers Questions Related to Target
Groups– New Hire gets approved by State of Residence
(Process Similar to Insurance Claims Verification)
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Key Georgia Tax Credit Opportunities
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Georgia Retraining Tax Credit• Capture up to 50% of qualified training costs
up to $1,250 per eligible employee– Retroactive for 1 year– Training Costs include Employee Wages, Trainer
Wages, Vendor Fees for Training, Travel Expenses, Development Time, Training Equipment, etc.
– Software, Technology, Equipment (New or Upgraded)– GA Residents Only, Full-Time, Existing Employees,
Non-Owner/Senior Management
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Qualified Examples
• OmniTracs• McLeod• Truckmate• ELD Software• Phone Systems• Marketing/Analytics
Software• Payroll/HRIS Software
• Orbcomm• Driver Cameras• Symphony• Keep Trucking• Four Kites• Security Systems
• Vendor Portals
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Georgia Retraining Tax Credit Cont.• Programs (DNQ)– Best Practices/Industry Conferences– Compliance/Safety Training– Customer Service/Soft Skill, etc.
• Training Costs (DNQ)– Hardware/Software Cost– Implementation/Data Migration– Support Fees
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Recent Tax Credit Projects
• Trucking Company (12 Office Employees) Implemented McLeod = $15,000– All Qualified Employees Reached the $1,250 per
Employee Maximum
• Trucking/Logistics Company (20 + Office Employees) Standard Year = $21,000+
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What’s your Tax Credit Gold Mine?
• BHAG (Big Hairy Audacious Goal)– Steven Covey & Jim Collins
• _________ Employees x $1,250 Max =
___________________.
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Georgia Job Tax Credits• Georgia Job Tax Credit (Must be in Favored Industry**
except Tier 1-Bottom 40 Counties)– Tier 1– Tier 2– Tier 3– Tier 4– Less-Developed Census Tract (LDCT)
• Georgia Military Zone Tax Credit (Any Business)• Georgia Opportunity Zone Tax Credit (Any Business)
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Job Creation ThresholdsLevel Jobs Created Benefit Tax Notes
Tier 1 5 $3,500 Income/WH Wait 1
Tier 2 10 $2,500 Income Wait 1
Tier 3 15 $1,250 Income Wait 1
Tier 4 25 $750 Income Wait 1
LDCT 5 $3,500 Income Wait 1
Military Zone 2 $3,500 Income/WH Same Year
Opportunity Zone
2 $3,500 Income/WH Same Year
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GA JTC: Notes• Qualifying Jobs– Work at least 35 hours per week– Be offered Healthcare at time of employment– Higher Weekly Wages than county with lowest weekly
wages• Bonuses– Joint Development Authority Bonus: Additional $500/job.• Essentially all GA Counties (But 1)
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Withholding Tax Options
• Tax Credits– Opportunity Zone Tax Credit– Military Zone Tax Credit
• Process– File Application/Notice through Georgia Online
Tax Credit within 30 Days of Filing Corporate Income Tax Return
– Once approved, applied to next payment
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Georgia Parolee Tax Credit• Through 1/1/2020, $2,500 per qualified new
hire. – Works 40 Consecutive Weeks in 12 Month Period– Full-Time (30 Hours/Week) and Earns Minimum
Wages Equal to or Above the GA County with the Lowest Average Weekly Wages
– Granted Parole within 12 months of Hire Date– **Can be Tracked through Federal New Hire Tax Credit
Program
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Other Georgia Tax Credits
• Headquarters Tax Credits• Basic Skills Tax Credit• Childcare Property & Childcare Tax Credits• Research Tax Credit• Film Tax Credit
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Action Plan & Recommendations
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Action Plan
1. Begin Pursuing & Capturing Every Tax Credit Opportunity
2. Look at Previous Years for Potential Tax Credits3. Implement Process to Track Business Activities4. Maximize Tax Credit Opportunities
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Resources
• https://dor.georgia.gov/documents/tax-credits• https://www.irs.gov/businesses/small-businesses-
self-employed/work-opportunity-tax-credit• https://www.georgia.org/competitive-
advantages/incentives/tax-credits• https://www.dca.ga.gov/community-economic-
development/incentive-programs/job-tax-credits
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Questions?
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About McMillian• Our purpose & passion is to help businesses create
new opportunities.• Core Values– Family, Integrity, Excellence, Teamwork
• Founded in 1998 & history goes back to 1972• Client Goals: Find More & Make it Easy• Over 800 clients around the country.