Did You Know These Tax Benefits For Minority-Owned Businesses?

There are a number of special government programs with increased access to contracting opportunities as minority business services, which you’ll definitely get to  know today!

The Federal government first passed the law encouraging minority-owned businesses to conduct fair business practice with other organizations by providing tax benefits and various other incentives.

Federal government contracts are segregated in such a way that a specific amount of contracts are awarded to small businesses, including minority-owned businesses!

How is the Federal government able to provide such incentives to small businesses? The answer lies in private companies as they each contribute to an amount of $500 billion that is passed on to the Federal government.

Contract Opportunities

One of the best features of such opportunities is the source to multiple contracts valued at $4 million for goods and services or $6 million for manufacturing!

This also means that minority businesses can negotiate with the government for those contracts even before they hit the open market!

You can end up gaining multiple contracts throughout the year while negotiating several contracts with different firms and agencies throughout the branches of the government.

More Benefits Including Government Resources

Step 1] Go to business.usa.gov

Step 2] Fill out the questionnaire that helps you explore a number of government contracts.

Step 3] Once you fill out the form, you will land on a page that lists a number of Federal government programs for which you have just been qualified!

Step 4] The above site is also useful in many ways, including resources designed specifically for minority-owned businesses with national, state, and local listings.

Tax Incentives Offered By Federal Government

It is fair to say the tax law doesn’t discriminate and small business owners don’t benefit with special incentives just because they belong to a minority group!

But they sure can take advantage of tax breaks while running a business enterprise.

1. New-Market Tax Credit Incentive

Investors making indirect investment in minority-owned businesses can claim NMTCI. Under such program, any taxpayer receives credit against income tax for investing in community development entities (CDEs).

The tax credit is approximately equal to 40% of the total cost of initial investment and can be claimed over a period of 6 - 7 years!

2. Indian Reservations

For businesses located on Indian reservations. If you hire employees who live near a reservation, you are eligible to access its benefits. Benefits include credit amount i.e 20% of the excess of current salary/wages.

Conclusion 

Does your business qualify for minority business services? You may have several different questions right now!

For valuable resources on how to certify your business as a minority or to know more about tax breaks, feel free to call Xperteks at 212.206.6262.