Federal and state employment and job creation incentives are developed to address overarching issues of our country’s economic development. Employment tax credit programs typically work to help your company increase funding and reduce costs associated with recruiting, hiring and training.
The R&D tax credit has come into its own over the last decade, as new regulations, court rulings and IRS guidance have resulted in broader positions taken by companies to maximize, and benefit from, the credit.
Even still, many businesses commonly report an unsubstantiated R&D tax credit amount on their tax returns, which results in audits and penalties down the line. That’s why it’s important to conduct an in-depth study of your company’s R&D tax credit eligibility.
As a CPA with a roster of rotating clients, you have a lot on your plate. You develop financial plans, conduct analysis and decipher complex financial transactions to help your clients make informed business decisions.
Managing each of your client accounts means you must also effectively navigate the ever-changing landscape of tax credits and incentives.
Employment incentives – especially job-creation credits – are among the most ignored or overlooked tax credit programs by businesses today.
Employment incentives are created to spur economic growth by encouraging businesses to develop and expand. However, the sheer range and built-in complexities of available employment incentives often deter businesses from even dipping a proverbial toe into the lucrative pool of employment-based tax credits and incentives.
If you’re running a business and not looking for employment-based tax credits, you are leaving perfectly good money on the table. Unearthing tax credits and incentives does require a fair amount of work, and it’s not always easy for businesses to focus in-house resources on this process. However, the tax savings found with employment-based tax credits are incredibly valuable for economic growth to occur.
The following three types of tax incentive programs could make all the difference in whether your business succeeds or fails:
The complex, ever-changing tapestry of intricately woven tax rules and regulations looms large above the heads of small business owners. Federal, state and local tax policies have a direct effect on how these entrepreneurs conduct their business activities from year to year. However, it’s often a lack of insight into the details of this fabric — which is designed to prop up the SMB community — that holds many business owners back from receiving the tax credits they deserve.
As a CPA, you’re tasked with guiding your clients through current and future taxation burdens. Staying on top of every update, every regulation change and every filing requirement, in every category of tax credits and incentives on all levels, is daunting.
Middle-market companies are the least likely to take advantage of the research and development (R&D) tax credit – a credit that is especially under-claimed (we’re talking billions of cash left untouched each year).
Prevailing myths about the R&D tax credit are a reason why so many companies fail to understand the eligibility requirements, because a lot of R&D regulations have changed in recent years. The fact is that the IRS and our government want to encourage as much research and development as possible.
Taxes. You understand the end game is to give the IRS as little money back as possible. You may even understand that, to see actual tax savings, you must take advantage of the tax credits available to you, along with deductions and income adjustments. However, your company may be overlooking some commonly under-utilized tax credits that are proven to result in significant savings.
