We’ve been reading a lot about our nation’s imposition of tariffs on Chinese goods and the subsequent impacts they are having both domestically and abroad. We are not foreign policy experts or economists but we do actively reach out to U.S.-based manufacturers and engineers. Our goal is always to help U.S. businesses grow and remain competitive. In a market we see as being made more competitive by fear, uncertainty, and doubt, we know one thing that always seems to help is the R&D Tax Credit. After the tariffs were first announced in Q2 of 2018, about 2.6 million new jobs were added to the U.S. economy, including 204,000 jobs in manufacturing. However, some industries, such as chemicals, paper, and textiles … Read More
Wishing you and your family a happy and relaxing fourth of July from everyone here at Tax Credit Hero!
Given the broad definition of R&D, research and development, by the IRS, many companies in nearly all industries can qualify for the R&D tax credit. Software companies, in particular, are constantly conducting R&D by using their creativity and innovation to build or improve upon their product offerings. The R&D tax credit is a Federal tax incentive designed to reward companies innovating in America. Below are just a few examples of R&D activities for software companies: Chances are, if your company develops software for sale, lease, or license, your company is conducting research and development. As long as the R&D occurred in the US, you should consider looking into claiming the R&D tax credit. While R&D tax credits are primarily used … Read More
Many of our clients claim their R&D tax credit and then go on to apply these credits against future payroll taxes. This is a dollar for dollar offset of a Qualified Small Business’ (QSB) OASDI liability (reported quarterly on Form 941). Note that any amount claimed as a credit against your payroll tax is not allowable as a payroll tax deduction. Only QSBs can elect the payroll tax credit. According to the IRS, your business is considered a QSB if it has the following characteristics: QSBs that intend to elect the payroll tax credit should know of a few limitations:
Happy Tax Day 2019! Today is the last day for calendar year end C-Corps (Form 1120) and Individuals (Form 1040) to file their 2018 taxes. If you can’t file by the end of the day, make sure you file an extension that will give you an additional six months to complete and file your tax return.
Mid-March is the tax deadline for calendar year end Partnerships (1065) and S-Corps (1120s). That is unless your company decided to extend its filing which would give you an additional six months to file. Mid-April is the tax deadline for your personal taxes (1040) as well as calendar year end C-Corps (1120). For our C-Corp clients that meet the requirements of a Qualified Small Business (per the IRS), and who plan to file by the April deadline, we actually encourage they file their Federal tax return by the end of March. The reason is because March 31st is the end of Q1 and these clients can start applying their R&D tax credit against Q2’s payroll taxes. Because 4/1 to 4/15 … Read More
Whether you claim the Regular Credit or the Alternative Simplified Credit, you will be getting a 21% bump in the R&D tax credit versus last year’s calculation!
Happy new year! We hope your holiday season was filled with peace and joy and that your new year brings in lots of fortune and success! With the start of the new year, we enter into tax season. Below are important dates for calendar year end companies. Remember, even though calendar year end C Corps are able to file in April, April falls in Q2. Meaning if the C Corp elects the payroll tax credit, they will not be able to monetize their R&D tax credit until Q3. That said, we encourage C Corps to try to file before the end of March.
We at Tax Credit Hero wish you peace, joy, and happiness this holiday season and in the coming year!
Happy Thanksgiving from the team at Tax Credit Hero. We are thankful for our families, friends, mentors, supporters, and clients. Thank you so much for being part of our journey this year. We hope your day is filled with love, laughter, and gratitude.