40.26 Business Credits

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image Filing Tip
Plug-in Vehicle
If you buy a plug-in electric vehicle, only the portion of the applicable credit related to business driving is part of the general business credit. For example, in 2012 you buy an electric vehicle for which there is a $7,000 credit. You use the car 60% for business and 40% for personal driving. Only $4,200 (60% of $7,000) is part of the general business credit.
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You may be eligible to reduce your tax liability by credits related to your business. Unlike personal credits, however, many business-related credits are subject to a special limitation, called the general business credit. The general business credit is not a separate credit; it is a compilation of one or more separate business-related credits that are specifically included by law within the general business credit. The reason for grouping the credits as one is to impose an overall limitation, explained below. The general business credit includes the following credits:

  • The investment credit on Form 3468, consisting of the rehabilitation property credit (see 31.8), the energy credit, and the reforestation credit;
  • The research credit on Form 6765*;
  • The low-income housing credit on Form 8586 (31.8);
  • The disabled access credit on Form 8826;
  • The renewable electricity production credit on Form 8835;
  • The credit for small employer pension ...

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