3 Tax Solutions To Implement For Common Tax Savings Strategy Problems

Written by Taz Singh, CPA. Updated Jun 10, 2015.

ThinkstockPhotos-453422335Don’t allow roadblocks in your tax strategy to prevent you from claiming valuable tax savings. Implement these solutions to common tax problems.

Many businesses have questions about the best way to increase tax savings when they encounter problems while pursuing R&D credits, employment tax credits and other tax incentives. Lack of documentation and misinformation are common roadblocks.

Cost segregation strategies raise even more questions due to the complexity of tax rules related to this method of reducing taxes. How do businesses know whether they qualify for cost segregation savings?

For almost every tax problem, there is a beneficial tax solution. If your business has encountered difficulties pursuing tax savings strategies, it is advisable to resolve your tax issues sooner rather than later. Discover answers to common tax incentive problems.

1. I Need Documentation To Support R&D Credit Claims

Having the proper documentation to support tax credit claims is imperative because of IRS requirements. Many businesses are qualified to claim R&D credits but don’t pursue them due to lack of proper documents. However, it is better to acquire documentation than to ignore potential tax savings.

One way to address the issue is to have researchers at your company track the time they spend on research that qualifies as an R&D expenditure. By implementing this process in advance, your business is able to claim credits for employee time without worrying about lack of documentation.

2. I Need To Submit Documentation For Employment Tax Credits On Time

If your business is working to claim employment tax credits, you are required to submit the proper forms within 28 days of a new hire. In order to ensure proper documentation, your employees must comply with the submission process.

It is beneficial to complete the employee screening process prior to or at the time of hire so that forms arrive in time to claim employment tax credits. By implementing a point-of-hire screening methodology, you ensure your ability to claim tax savings.

3. I Want To Know If I Qualify For Cost Segregation Savings

Cost segregation is a valuable method of reducing taxes when the strategy is planned properly. If you are unsure whether you qualify to increase savings through this channel, a cost segregation analysis conducted by a tax expert determines how much you are qualified to save.

 The cost of non-structural elements of your building such as lighting, plumbing and electrical systems may be eligible for depreciation over a shorter timeframe. Your ability to defer taxes decreases costs and improves your business’s cash flow.

While there are many avenues for reducing taxes, pursuing the right tax savings strategy for your business requires accurate information and, often, professional advice. A tax expert at a CPA firm that offers cost segregation services is a valuable resource when you have questions about how to pursue all avenues for reducing taxes.

While R&D credits, employment tax credits and cost segregation are valuable tax savings strategies to pursue, it’s important to focus on the strategies that are most likely to reward you with tax savings. Researching tax incentives for which you qualify is a beneficial first step.

Ready to learn what tax incentive opportunities are available to your business? Discover whether you are eligible to claim R&D credits. Find Out If Your Business Qualifies

Topics: R&D Tax Credit, Employment Incentives, Cost Segregation

Taz Singh, CPA

Written by Taz Singh, CPA

Taz has 20 years of experience in tax and business incentives. Prior to establishing CTI, Taz served as a corporate tax auditor for the California Franchise Tax Board. During his tenure, Taz specialized in auditing tax credits, including manufacturers’ investment credits, research & development credits and credit limitations (IRC 382 Limitation) due to ownership changes.