Credits When Credits Are Due
The Taxpayer "Relief" Act? Ha! Congress' 329-page attempt to improve the tax code last year gave small businesses a host of breaks, but with a confusing array of start and end dates. Business owners must act soon to take advantage of credits expiring this summer. Some tips: Frontload research spending before June 30, and the Research Credit lets you subtract 20% of what you spend from your final tax bill. Also, hire from a covered group of workers before July 1 to take advantage of the Work Opportunity Credit. Senior citizens and other recipients of supplemental security income have joined ex-cons and welfare recipients among those who qualify. Employers can subtract from their tax bill 40% of first-year wages (up from 35%), to a maximum of $2,400. The new Welfare-to-Work Credit is more generous: up to $3,500 in the employee's first year and $5,000 in the second. Plus, it doesn't expire until Apr. 30, 1999.