Posted by Jeffrey Feingold on 10.15.20
When you hear the words, "R&D tax credits," if you think of aggressive tax planning, you are not alone; however, you would be mistaken. In fact, the misconception that tax relief involves aggressive tax planning is a common one. It seems every day there is news of a corporation trying to dodge paying their 'fair' share of taxes by using aggressive tax planning. While it is true that some companies may push the envelope of what is legal and perhaps moral when it comes to paying taxes, this has nothing to do with R&D tax credits.
R&D tax credits are a program that was designed by the United States government to encourage companies, no matter their size, to expand their research and development by giving them a way to offset some of the expense of that research. On the other hand, aggressive tax planning is used by a company to find a favorable tax position which can include offshore accounts and other tax shelters. While this might not be illegal, some companies may not be comfortable with this aggressive tax planning. R&D tax credits have been made available by the government and are expected to be used. Certainly, the IRS does not always make this easy. As with any section of the tax code, it is best to work with a professional to ensure you are following the letter of the law.
Even though it can be difficult to determine if you qualify for R&D tax credits, it is worth the time and effort involved. These tax credits can save your company or corporation thousands of dollars each year you qualify to take them. This can quickly add to your bottom line. In today's world where technology is old six months after it is developed, R&D tax credits allow your company to stay on the cutting edge and have some of those expenses offset. Unfortunately, there are many tech companies that do not realize these are available to them, or they have the misconception that tax relief involves aggressive tax planning which is not the case.
It is best to find an expert that deals with R&D tax credits on a regular basis to ensure you are determining your eligibility correctly and are receiving the full amount of tax credits you are entitled to. Tax Point Advisors can help you with all of your R&D tax credit needs. We provide you with a free assessment that will determine if you are qualified for R&D tax credits. We will then help you determine the savings to your company. Finally, Tax Point Advisors will let you know how much it would cost your company to have these tax credits managed for you.