Tips for Minority-Owned Business Taxes

Although a minority-owned business is subjected to the same tax laws as any other business, there are some tax breaks that are available to small or start-up business that can help a minority owner succeed. These tax breaks are particularly helpful if the business is located in a economically disadvantaged area or if the business is newly established. Learning more about these incentives can help a business owner take advantage of the available tax breaks and overcome some of the obstacles to successful business ownership.

Breaks for Indian Reservations

Although tax breaks for businesses located on Indian reservations come and go, it’s important for business owners in these areas to frequently check to see if old incentives have been extended or new ones have been established. In the past, a business physically located on a reservation or that had a percentage of workers who live on a reservation meant a tax break.

Breaks for New Business Investors

Some new business owners choose to work with an investor to get started from the ground up. Investors can receive tax incentives for investing in business owners who are starting businesses in certain low-income or distressed areas, especially if the business owner is new to the market. Like most tax breaks, these incentives can change over time so if you are an investor looking for a tax break for investing in a project that is a start-up for a new minority business owner make sure to see what incentives are currently active.

Breaks for Businesses in Disadvantaged Areas

Although you do not need to be a minority business owner to qualify, tax incentives are often available to individuals who decide to start a business in a distressed or low-income area. Incentives vary by location and include urban locations that the Department of Housing and Urban Development designates as well rural areas that are designated by the Department of Agriculture. In addition to federal tax incentives, some business owners in distressed areas also have state-level incentives that give relief from state taxes.

Other Assistance for Business Owners

For individuals who want to learn more about the IRS and tax rules, the IRS developed a multilingual gateway to assist them in a variety of different languages. Being able to study the tax information in a native language can help some individuals find tax breaks that they could have otherwise missed.

Minority-owned business owners and investors can benefit from learning more about the available tax breaks, even though these incentives are not minority specific.


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