Last week we talked about five ways telecommuting can save your small business money. I promised there was another excellent way to save money for the small business in Virginia: Telework Tax Credit. Your ears perked up when I said tax credit, right? It’s February, and as a business owner you are finishing your financials from last year and assembling stacks of paperwork for your accountant. Did you know if you had expenses incurred during the 2013 tax year for teleworking and you had filed a Telework Expenses Tax Credit Reservation Application form (TEL-1) in the previous year, you could be eligible for a tax credit up to $50,000 to offset your Virginia tax liability?
Fat lot of good this does you now, right? But now you know and right now is when you begin to prepare for next year! The Telework Tax Credit has been extended through 2016. What do you need to know to take advantage of this refund?
What is the Telework Tax Credit?
The Telework tax Credit was designed to encourage employers in Virginia to reduce commuting to and from offices.
How can my business qualify?
You must submit a Telework Expenses Tax Credit Reservation Application Form (TEL-1) to the Virginia Department of Taxation. This would be submitted in 2014 for expenses incurred in 2015. There is a short window to submit the TEL-1. It is from September 1stto October 31st. The application is only one page, and it can even be faxed rather than mailed. It seems a long way off? It’s worth it! Keep reading!
What is the maximum tax credit possible?
After approval, you will be eligible for a tax credit of up $50,000, which consists of development, assessment and equipment expenses. What does it take to be approved? Your business will be required to have teleworking policies in place. Many businesses have looked at the possibility of allowing their employees to telework part-time and they have seen the potential for cutting their overhead but have balked at the initial start-up cost. This is your chance to eliminate the cost with a tax credit!
How can we help?
Let TMI assist you in getting your office ready to have streamlined communication, reduce your operating costs and increase your employee retention by offering teleworking opportunities. You can receive a credit for the assessment costs up to $20,000. After you have your business technology ready for employees to telecommute, then you will need to prepare your employees. An additional credit of up to $1,200 per employee is available to reduce the cost of setting up employees with the necessary hardware, software and telecommunications equipment. (Keep in mind this credit is only available to employees who are new to telework!)
There is one last document to send in after the year you qualify for the credit. It is called the Telework Expenses Tax Credit Confirmation Application (TEL-2). This is a reconciliation of the expenses you actually incurred for the Telework Program. You would need to file the TEL-2 by April 1st of the next year. The application is relatively simple. It is two pages long, and can be faxed or mailed in as well.
I’m not sure I want an IT company giving me tax advice.
Smart thinking. We don’t want to be offering up assistance outside our arena of expertise either. TMI is proud to be partnering with CPA Brian Wendroff at Wendroff & Associates, CPA in Arlington, VA, in order to bring you the expertise you need to ensure you make the most of this opportunity.
I encourage you to connect with TMI and let us help you assess your small business teleworking opportunities. Together with Wendroff & Associates, CPA, we can bring the future of your small business into the present and save you money. What could be better?