Restaurant owners are proud of their business, but running it is very hard and demands time. Owners need to take care of the quality of the food, service, and repairs. In all of this time-consuming and hard work, managing taxes can be tough. Filing taxes without knowing everything can make you miss savings and benefits.Â
If you are a restaurant owner in Oakland, then contact your nearest restaurant CPA in Oakland. They are experts who have experience and knowledge about taxes. They can help you file your taxes by telling you about all the possible tax credits you can use while still being compliant with tax laws.Â
Read this article to learn the most important tax credits that restaurant owners can get. This article will help you gain a proper understanding of how to take advantage of these and grow your business.Â
Work Opportunity Tax Credit (WOTC)
Federal incentive programs like the Work Opportunity Tax Credit (WOTC) encourage businesses to hire some groups with employment barriers. Restaurants can make this beneficial because of their turnover rates and diverse workforce.
Restaurants can use the WOTC not only to reduce their tax liabilities but also to contribute to society by giving jobs to people who need them. Make sure to have proper documentation and file timely to get the full benefit of this credit.Â
Groups that are included in this are veterans, especially those with disabilities caused while they were surviving, and people who do not have a job for 27 weeks or more.Â
How to Claim the Credit
If you want to claim their credits, then you need to submit IRS Form 8850 to your state workforce agency within 28 days after hiring the employee. Talk to a tax expert to make sure that you submit correctly and get the maximum claim.Â
Financial Benefits of WOTC
Financial benefits depend on the group that the employee belongs to and the number of hours they have worked. Credits can be anywhere between $1,200 to $9,600 for each employee. The credits are applicable for the first year of employment, which helps get good workers employed.Â
Employee Retention Credit (ERC)
This was started to support businesses in case of economic problems, especially during the pandemic. If your restaurant was affected badly by lockdowns and reduced dining capacity, then ERC can give you a lot of relief. It is very important to know how ERC works so that you can get maximum claims.Â
Who Qualifies for ERC?
Restaurants are affected badly by government regulations, and restaurants have seen a big drop in receipts compared to 2019.Â
Benefits of ERC
Employers can get up to $26,000 per employee in a quarter. Also, the credits that are given are refundable, which means if you do not owe enough tax, then you can get these as cash.Â
Steps to Claim ERC
For each quarter, collect payroll records and gross receipt documents. Then, file amended IRS Form 941-X for prior quarters to recover retroactive credits.
Energy Efficiency Tax Incentives
If you invest in energy efficiency in your restaurants, then this can be a win-win situation for you as this will help in reducing costs and also make you eligible for tax deductions or credits.Â
Qualifying Improvements
If you install energy-efficient HVAC systems, lighting, and refrigerators, then you are eligible to get this credit. Also, if you install solar energy or any other renewable energy for power, then you can also claim these.Â
Available Tax Credits
If you are eligible, then under Section 179D, you can get a deduction for doing energy-efficient upgrades. There are some state and local incentives that can increase your savings. 
Steps to Claim Energy Credits
To claim these credits, make sure before hiring the contractor that they will provide you with installation certification. Keep the receipts and documents for filing your taxes.Â
Get Tax Benefits Today!
To claim credits for restaurants, it is important to have proper understanding and knowledge. Consult with a tax professional today and make sure that you do not miss out on any good opportunity.Â
