Tax Incentives Blog

Many businesses are unfamiliar with the numerous professional tax solutions that may help improve their budgets. Most potential savings are available through tax credits and strategies. However, without knowledge of these tax solutions, it becomes more challenging to effectively capture savings.

Learn more about how to optimize your tax strategy so you capture the maximum benefit. When your company is pursuing employment incentives, R&D credits or cost segregation savings, tax experts recommend the following techniques.

Helping your clients pursue tax strategies that maximize savings should be a priority for CPA firms seeking to increase client satisfaction and loyalty. Tax credits and deductions allow your clients to reduce tax liability when they conduct research, hire certain employees and make property investments.

Ensure your clients feel comfortable pursuing tax savings and get the most out of valuable tax incentives by following these four tips to help clients claim tax credits and deductions:

Don’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.

Delivering superior client services and a customized experience helps CPA firms stand out among other firms in a competitive market. The best way to ensure client loyalty is to offer tax solutions and implement cost-saving strategies that exceed the benefits other CPA firms provide.

Cost segregation is a method of increasing tax savings that many businesses don’t take advantage of due to the strategy’s complexity. However, tax services help you improve cash flow with a cost segregation analysis even if you are still unsure of how the process works.

To begin with, it is beneficial for businesses to familiarize themselves with the basics of what a cost segregation study is, how cost segregation increases cash flow and how to select a tax service to assist in implementing this strategy.

One reigning myth of cost segregation is that conducting a study could result in owing more tax when choosing to sell your property. This myth is derived from text within the Internal Revenue Code (both Section 1245, personal property and Section 1250, real property) that deals with depreciation recapture. 

The IRS procedure for depreciation recapture is to collect income tax on a gain realized by a taxpayer when the taxpayer disposes of an asset (such as real estate) that provided an offset to ordinary income for the taxpayer through depreciation. 

While outsourcing was once considered a “trend,” more and more companies across all industries are now moving towards outsourcing as a smart, cost-effective business plan. By now, you likely already know that many CPA firms are outsourcing various processes to achieve greater efficiency and strategic aim. 

CPA firms are continuously turning towards outsourced tax experts for their wealth of expertise in a particular segment of the industry. Also, the right outsourced tax service comes equipped with state-of-the-art technology created and refined by the experts themselves, who use the software daily and with a variety of clients. 

Cost segregation is described by the IRS as the most preferred method for accurately measuring and classifying lump sum costs for depreciation purposes. Anyone tuned in to cost segregation understands that the IRS scrutinizes these studies during audits. 

The major flaw the IRS is searching for is a lack of factual information upon which the cost segregation conclusions are based. Section 6662 of the Tax Code underscores the need for total accuracy in a cost segregation analysis: The negligence penalty is 20% of the underpayment in tax. 

According to a recent article in the Journal Of Accountancy – due to new regulations effective for tax years beginning on or after January 1, 2014 – every business that owns tangible property will be required to file at least one IRS Form 3115 for the federal tax return.

Most CPA firms recognize that tax incentives are a valuable opportunity to improve their clients’ budgets. Tax experts knowledgeable about potential tax solutions make sure to investigate programs that their clients qualify for. 

However, not all CPA firms take full advantage of every tax credit available to their clients. Given the number of opportunities, some tax incentives are overlooked more than others.