As tax season approaches, it is important for your business to pursue Research and Development tax credits
This is part one of a two part series about claiming research and development tax credits. The content has been prepared by RnD Consulting, one of our newest members, and experts in the R&D field.
Contributors: Bruce Kletsky, Brian S. Halminiak, Robert L. Singer
R&D tax credits is real ‘CASH in your POCKETS’. Anytime you are involved in “HOW TO / CAN WE” problem solving, thinking or actions connected to engineering, computer programming (including website development), formulating, biological or physical sciences you have CASH TO RECOVER!
If you are not pursuing your credits each year you are falling behind your competitors because they are recovering their cash from these credits each year.
The credit landscape has changed for 2016 & beyond. You can now use your credits to reduce your AMT while some companies will be able to reduce their payroll taxes by their credits. They were also made permanent and will no longer expire every two years.
If you have been claiming the credits in the past there is a 75% probability that you have been understating your CASH RECOVERY by 50% or more.
Who is a good candidate for the R&D credits?
The simplest answer is usually that any business that manufactures anything is a good candidate for the R&D credit, but potential candidates are actually much broader than that. Manufacturing includes those companies that are involved in the design of new or modified products (even if it outsources manufacture) and it also includes those companies that are involved in contract manufacturing someone else’s products.
Any company that develops its own software (for sale, for license or to support its own operations) is also an excellent candidate. Engineering design/consulting companies are also excellent candidates.
How do I benefit from the R&D credit?
The Research & Development (“R&D”) tax credit offers incentives for businesses who make an effort to develop new products, processes or software. If your business (or your client’s) has these activities and has costs associated with these activities, then you follow the rules of §41 to calculate the R&D credit you are eligible for. But capturing the credit does not ensure benefit from the credit.
How do I maximize the R&D tax incentive?
Congratulations, you’ve recognized that your business has R&D activities and are claiming the credit, but are you capturing all you can (and are allowed to) in order to maximize your credit?
To learn more about if you qualify for R&D Tax Incentives, or to go in depth about the benefits and maximization of the R&D credits, please check out these frequently asked questions.
Please contact us to walk you through the circumstances of your business so that you are able to determine that your R&D credit strategy is not leaving money on the table.
The credit landscape has changed for 2016 & beyond. You can now use your credits to reduce your AMT while some companies will be able to reduce their payroll taxes by their credits. They were also made permanent and will no longer expire every two years.
If you have been claiming the credits in the past there is a 75% probability that you have been understating your CASH RECOVERY by 50% or more.
Who is a good candidate for the R&D credits?
The simplest answer is usually that any business that manufactures anything is a good candidate for the R&D credit, but potential candidates are actually much broader than that. Manufacturing includes those companies that are involved in the design of new or modified products (even if it outsources manufacture) and it also includes those companies that are involved in contract manufacturing someone else’s products.
Any company that develops its own software (for sale, for license or to support its own operations) is also an excellent candidate. Engineering design/consulting companies are also excellent candidates.
How do I benefit from the R&D credit?
The Research & Development (“R&D”) tax credit offers incentives for businesses who make an effort to develop new products, processes or software. If your business (or your client’s) has these activities and has costs associated with these activities, then you follow the rules of §41 to calculate the R&D credit you are eligible for. But capturing the credit does not ensure benefit from the credit.
How do I maximize the R&D tax incentive?
Congratulations, you’ve recognized that your business has R&D activities and are claiming the credit, but are you capturing all you can (and are allowed to) in order to maximize your credit?
To learn more about if you qualify for R&D Tax Incentives, or to go in depth about the benefits and maximization of the R&D credits, please check out these frequently asked questions.
Please contact us to walk you through the circumstances of your business so that you are able to determine that your R&D credit strategy is not leaving money on the table.
 630.258.498 | Bruce Kletsky is Vice President for RnD Consulting. In this role, he is responsible for business development and managing client relationships, in the area of federal and state tax credits and incentives; focusing on U S and international research and development tax credits (R & D). Kletsky is responsible to help corporations, and their CPA firms, qualify for this tax incentive, create a transparent experience, and identify solutions that will maximize this incentive. Kletsky has over 28 years of accomplishments in tax consulting, having worked for several national public accounting and tax consulting firms in similar positions of responsibility; representing over 450 corporations. Kletsky industry specialization and experience includes: manufacturing/contract manufacturing industry, tool & die, steel, biotech, oil & gas, apparel, food processing, engineering, chemical, software development, architectural and construction, and automotive suppliers. |
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