General contractors and construction companies are often struggling in this economy to keep their heads above water. The means to help them may be right in front of their eyes, and they are missing it. The federal government, as well as individual states, allow tax credit for much of what the contractors are doing. These tax credits are substantial. They are not deductions, but bottom-line, dollar for dollar reductions on taxes owed.
Michigan companies have a favorable tax credit available to them not only on the federal level, but also on the state tax level. Many companies do not claim it because they don't understand that they qualify, or they are afraid of being audited. This is a bottom-line, dollar-for-dollar tax credit for research and development. It is not a deduction. This is one of the most significant money saving tax incentives ever offered by the government.
With another tax season underway, those who work in the construction industry are likely seeking ways to reduce their tax liabilities. Fortunately, there are two great ways construction companies can save thousands to millions of dollars—the research and development (R&D) tax credit and the 179D energy tax deduction.
Unlike many firms, Tax Point Advisors conducts a site visit and onsite testing for every energy efficiency study, as required by the IRS, in order to document results, AND the site visits are done by our certified engineers. Many firms send non-engineering staff to conduct cursory site visits, but this is a sub-standard approach.
The Research and Development tax credits were enacted in 1981 as part of the Economic Recovery Act to spur the U.S. economy and create jobs. It was intended to encourage research among U.S. companies and keep our country strong. Many U.S. companies manufacture overseas. How does this fit into the plan for the R&D tax credits?
Costs incurred by a shipbuilding company in developing several vessels are not qualified research expenses that would allow the business's parent company to claim a $1.1 million research tax credit, the U.S. Tax Court said Thursday.
Yes, the federal government is reducing taxes for businesses with the R&D Tax Credits. It is true. This is the most lucrative tax incentive out there, and yet only a third of the eligible companies are claiming it. Unbelievable! Is it too hard to understand, too much work to prepare, or too likely to cause an unwanted audit? Let's take a look at the benefits and risks of the R&D tax credits.
Many people believe that R&D tax credits really don't help the bottom line. That's because either they don't understand what they are, or they haven't looked at the math. This misconception keeps many companies from profiting from a tax credit that could help them, because they think it isn't worth taking the time to do. Let's look closer at these credits.
With many American businesses around the country struggling due to the COVID-19 pandemic, the U.S. government responded by passing multiple stimulus packages and tax credits throughout 2021. One essential tax credit businesses should be aware of is the Employee Retention Tax Credit (ERTC).
New tax credit expansion will benefit most businesses - don't leave money on the table, call Tax Point Advisors for your free assessment.