Strategies for Capitalizing on R&D Credits for Small to Medium-Sized Businesses

Find ways to support your clients and identify opportunities to minimize tax liability.

The biggest benefit to this topic is to find ways to support clients and identify opportunities to minimize overall tax liability. Tax laws are complex and become increasingly complicated every year. As a result, pinpointing ways to effectively support clients and potentially lower tax burden becomes more challenging. The Research & Development Tax Credit is one of the more complicated and difficult to understand tax incentives available to U.S. taxpayers. R&D tax professionals need to answer several essential questions, such as: how can I tell if the activities of my client qualify for this credit?; how does the IRS define "research and development" and how does that translate into a tax credit? This material focuses on the CPA and financial executive whose responsibilities include minimizing their clients' or companies tax liability. We will review how and why activities qualify as well as how the time and effort expended by the taxpayer can be translated into a federal (and in many cases, state tax credit). Failing to understand how to properly assess and document the qualifying activities is the most common mistake made and can lead to an unfavorable result if audited. The topic is critical for CPAs and financial executives who need to understand both the basics of the R&D tax credit and the potential pitfalls that may disqualify an activity from generating the credit.