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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 with the help of an experienced small business lawyer!
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.
Contact: Richard Trimber, rtrimber@gcpc.com
General Counsel, P.C. Corporate and Tax Practice Group
Telephone: 703-556-0411.
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General Counsel, P.C. – Every Business Needs a General Counsel: General Counsel’s Small Business Lawyer has 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
is intended.