Tax Credits

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As a dollar-for-dollar reduction in actual taxes owed, a tax credit is far more valuable than a tax-deductible business expense which merely reduces the amount of income on which one is taxed. Making use of tax credits when eligible is an absolutely essential tax planning tool that can be utilized to immediately conserve cash. Unfortunately, many individuals and businesses that are eligible to take advantage of tax credits do not do so due to misunderstanding of the associated requirements or due to a simple lack of planning. Do not miss out the savings that tax credits provide.

The Research and Development Tax Credit by the Numbers

Of all the tax credits made available by the taxing authorities, the Research and Development Tax Credit is one of the most valuable credits leveraged by business entities. Unfortunately, many eligible businesses fail to take advantage of this credit. Of the 11 Billion Dollars in Research and Development Tax credits that are taken annually, IRS statistics show that over 95 percent of these credits are taken by corporations with more than 1 Billion Dollars in sales. Not only are small businesses eligible for the Research and Development tax credit, but there is a special benefit that is only available to small businesses: namely, certain small businesses may be eligible to use the Research and Development tax credit to reduce the employer portion of Social Security Taxes by up to $250,000 per year.

The Research and Development Tax Credit by the Numbers

Companies that meet the following four-part test may be eligible to take the research and development tax credit:
1.    Development of a new or improved product or process
2.    The research relies on technological processes as utilized in the physical sciences, life sciences or computer sciences
3.    The research is attempting to eliminate uncertainty about the development or improvement of a product or a process
4.    The research included experimentation to evaluate alternatives

Get a Free Consultation to See if You Qualify for the Research and Development Tax Credit

Businesses often think that only research done in a laboratory is eligible for the Research Tax Credit, but nothing could be further from the truth. Contact us today for a free consultation to see if you qualify for the Research and Development Tax Credit and can take advantage of this powerful tax-saving tool.