If you’re the sole proprietor of your own business, in addition to deductible business expenses that can reduce your taxable income, you may also qualify for some business credits that will lower your tax liability.
Some business credits can be very particular, like the Carbon Dioxide Sequestration credit, an energy-efficient credit for a business that captures and disposes of carbon monoxide in a qualified facility. However, there are also more practical, everyday credits that business can utilize.
If you have employees, you may be able to take the Credit for Employer-Provided Childcare Facilities and Services. This credit applies to qualified expenses you paid for childcare resources for your employee.
There’s also an Energy Efficient Home Credit (form 8908) which is for eligible contractors of certain homes sold or leased to someone else for use as a residence.
The Work Opportunity Tax Credit rewards eligible business owners for hiring people who are from high poverty areas or have special employment needs.