A paper that reads “Tax Heaven” placed in a typewriter

Could Your Business Benefit from an R&D Tax Credit?

Your small or medium-sized company plays an essential role in generating the US economy. According to a report by the Office of Advocacy US Small Business Administration, small and medium enterprises create more than two-thirds of new net jobs.

However, you may face harsher challenges on the business front than your more powerful and wealthier enterprise counterparts. But fortunately, the government has incentives in place to help you obtain maximum social and economic benefits.

One of these innovations is an R&D tax credit that can help you reduce your tax liability. Here’s how it works:

What is the R&D tax credit?

Innovation can improve your sale by allowing you to make better products. While big companies have trillions of dollars to spare on research, small and medium-sized businesses often have to cut their R&D budget. The government’s R & D tax credit allows you to apply up to $250,000 of your research credit against your payroll tax liability.

While around 10–15% of the money you spend on research and development can be taken back as a tax credit, start-ups who haven’t begun generating revenue can take it up as an immediate benefit against their payroll.

One exciting thing about the R&D tax credit is that while it’s a federal incentive, many states also offer their versions of the appealing tax impetus. If you’re based in California, look out for the state’s attractive R&D tax credit.

A person working with numbers and graphs on his laptop

Which businesses can apply for the R&D tax credit?

Perhaps the most prevalent misconception about the R&D tax credit is that only big businesses are qualified to apply for it. However, this is far from the truth as any enterprises that make new and innovative products qualify under the US tax code.

This means that whatever field you operate in—agriculture, food, textile, or pharmaceutics—you can apply for the R&D tax credit.

Take the first step in applying for the credit

Not every consultant or tax preparer has the expertise to guide you through the stringent process of applying for an R&D tax credit. Before you choose an advisor, make sure that they are experienced enough to guide you well.

A trusted and highly trained consulting firm like The Darson Group can help you collect all the necessary documents to apply for the credit. So, talk to our consultants today and find out if your business is qualified to file for the R&D tax credit.

We also offer cost segregation services and WOTC tax credit services at unmatched rates.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top