As the school year begins to wind down and students look at final grades, a number of them are contemplating extra credit to enhance their GPA. Remember that when you plan how much you want to pay Uncle Sam next year. As much complaint as we hear over tax liability, we often hear few solutions. I want to offer you some hope. If you want to lower your tax burden, begin now in preparation for April of 2023.

Think in term of tax credits, which dollar for dollar, are subtracted from the taxes you owe. This article offers a wealth of information, and two of the options seem pretty doable. Rather than tracking expenses, invest in opportunities which not only grow your business, but also decrease your tax liability. Some credits are beyond small businesses…but some aren’t!

The Work Opportunity Credit offers you the chance to deduct wage you pay to certain segments of the population. You may be paying wages anyway, so why not pay them to specific types of needy people? Veterans are one class. Hire a vet and deduct up to 40% of the first $6000 dollars of your employee’s first year’s wages. That’s a tax credit of $2400. It doesn’t have to be a veteran. It can be a handicapped person receiving SSI or someone who has been unemployed for a long period of time. Contact our local Community Services League for candidates who need jobs. All of this requires advance planning, but it pays off when computing the taxes you owe.

Another worthy option is the Employer-Provided Childcare Credit. It not only makes you more attractive in the job market, but if you have children or grandchildren, what better way to deduct salaries of childcare workers? Dedicate an area, track your expenses in fixing it up, and hire someone to provide babysitting to extra children on site. A recent survey of 2000 working parents revealed that 2/3 would consider switching jobs to a company offering childcare. Build goodwill, foster loyalty, and attract highly skilled employees in the process. I think it’s a win/win.

Tax credits aren’t just for businesses with employees. If you are a sole proprietorship, the IRS offers a handy guide for additional tax credits for individuals who want to plan ahead. Most of us are aware of childcare tax credits, but many entrepreneurs are more established adults. Childcare may not be a priority for many of us. There are others. If you routinely deduct a small income from your business, for example, you probably qualify for a saver’s credit if you put money into an IRA or 401(k). If you offer your services as a consultant, you may qualify for Earned Tax Credit.

Look at the Chamber’s business list and contact a tax professional for help in planning ahead. Pay less next year by spending wisely now. As a student, I always loved extra credit…didn’t you? This is the Fed’s extra credit program. Take advantage of it!