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Does Your Company Have a Few Thousand Dollars Hidden in Operations?
Last year a friend purchased a hybrid car and was surprised when he got several thousand dollars back in his tax filings because the purchase qualified for a CREDIT–payment back to him on his taxes. Your company could get a much larger CREDIT–payment back from the IRS too!
Ask yourself if your company does any of these:
- Developing or engineering a new or improved product, process, formula, or software
- Evaluating the feasibility of a product, process, formula, or software
- Developing engineering architecture
- Developing experimental models & prototypes
- Testing an experimental product, process, formula, or software
- Beta testing
- Improving processes or the manufacturability of a product
- Technical design reviews
- Participating in technical meetings
- Documenting the results of research
- Maintaining research equipment
- Compiling research data
- Fabricating experimental models
- Experimenting with new technologies
- Creating more efficient and environmentally friendly designs
- CAD or 3D Modeling
- Supervising technical personnel engaged in R&D
Contact General Counsel, PC for a free assessment to determine if you qualify for Research and Development Tax Credits.
It is a common misconception of R&D tax credit that participants must wear lab coats, wear protective goggles and fiddle with test tubes all day to qualify for the credit. NOT SO! The definition of R&D for tax credit purposes is fairly broad. Companies are able to qualify activities beginning with the development of concepts and extend to the point where a product, process, formula, or other business component is ready to be commercially released.
Qualifying expenditures include:
- Wages: For those directly working on, supervising, or supporting the development process
- Supplies: Items used or consumed during the development process
- Contract Research: Outside vendors brought in to assist in the development process
The Potential Benefits of the R&D Tax Credit
These are some of the R&D Tax Credit benefits:
- Up to 13.5 cents of R&D tax credit for every qualified dollar
- Dollar-for-dollar reduction in your federal and state income tax liability
- Increased in earnings-per-share
- Reduction of your effective tax rate
- Improved cash flow
- Credit carried forward up to 20 years
- Recent regulatory developments make claiming the R&D tax credit for companies much more feasible
- Look back studies can recognize unclaimed credits for open tax years (generally 3 or 4 years)
See your future. Plan your future. Attain your future.
General Counsel, P.C. Corporate and Tax Practice Group
General Counsel, P.C. – Every Business Needs a General Counsel: General Counsel’s Business and Tax Practice Grouphas over 40 years of professional experience in counseling business owners on all aspects of business and tax matters. Our attorneys have extensive experience representing a wide range of local, regional, and national companies and business ventures.
The matters discussed in this newsletter are for informational purposes only and no legal advice