While the Tax Cuts and Job Act of 2018 (TCJA) will have a profound impact on taxpayers filing their 2022 tax returns, the new law change should not have the same impact on the manner in which the taxpayer will compute the R&D tax credit.
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.
Developing new Artificial Intelligence (A.I.) and robotic technology as well as improving on past technologies requires research and development. Companies can and should be utilizing R&D tax credits during their innovation process in the development of any new Robotics or A.I. products and technologies.
Now is the perfect time to switch to an R&D credit and tax incentives firm you can trust. It’s essential to remember that there are very important quality differences between different advisory firms. Tax Point Advisors provides services and solutions for all your specialty tax credit and incentive opportunities, and, working coast to coast with businesses for more than a decade, our advisors have proven they know that trust is earned.
Take a look at the new Advanced Manufacturing Tax Credit.
Under the new law, the maximum R&D Tax Credit which can be utilized to lower payroll taxes doubles for tax years beginning after December 31, 2022. Eligible small businesses can now reduce payroll taxes by up to $500,000 annually, doubling from the prior limit of $250,000. Another significant enhancement is that the credit can be utilized to reduce the Medicare portion of taxes (before the new law, the offset was only allowed against Social Security tax). Taxpayers with credits in excess of tax liability may carry forward unused credits.
Business owners across all industries could be missing out on potentially tens of thousands of dollars, all from not knowing enough about the Employee Retention Tax Credit (ERTC). Although the eligibility period for the credit was ended retroactively to the end of the third quarter of 2021, the time frame for making a claim under the program will continue for at least three years. This is great news for the many companies across the United States that did in fact qualify for the credit but didn’t know they qualified. There’s still time! Businesses can still claim their tax credits retroactively.
TPA is asking all privately held clients and trusted advisor partners to take a fresh look at the Interest Charge Domestic International Sales Corporation (“IC-DISC”) tax incentive. Even if you are already using the IC-DISC, TPA may be able to help you increase your savings. The incentive permanently reduces the federal tax rate for owners of privately held companies on certain income. The immediate and permanent tax rate decrease on this income is as high as 17%! (40.8% vs. 23.8%). Achieving this arbitrage does not require any change in business operations whatsoever. The IC-DISC is recommended by the U.S Department of Commerce.
Article from taxnotes.com
WASHINGTON – Ways and Means Republican Rep. Jackie Walorski (R-IN) introduced H.R. 8253, the Fostering Innovation and Research to Strengthen Tomorrow (FIRST) Act, which would double the research and development (R&D) tax credit and allow more small business startups to access this credit.
Small Business Week, which runs now through May 6, is an excellent time for Tax Point Advisors to remind small businesses of an outstanding opportunity to claim valuable tax credits for eligible R&D activities.
