3 Ways that Research and Development Tax Credit Studies Can Help You
Research and Development Tax Credit (R&D Tax) was introduced back in 1981, as a way of motivating companies in the United States (US) to invest in various industries. It was a tax relief meant to stir up manufacturing and innovation and promote the country’s economic growth. This incentive was meant for all organizations irrespective of their size. However, this is not the case now as small organizations account for a mere 7% of the credit yet they form the bulk of US’s industries at 98%. Because of this, it is important that the general population understand the benefits of these credits. Here are three ways R&D tax development study can be of use to you.
- Know the Situations You Can be Awarded
Small and start-up companies account for 98% of all organizations in the US. Many are unaware of the immediate source of funds that can really help grow their businesses. Studying about R&D Tax Credits gives you an upper hand when you are starting or are already running a business. You’d be surprised to know that the federal government gives out more than $7.5 billion in R&D Tax Credit benefits every year. This information is unknown to many who actually carry out activities that qualify them for these benefits. If your organization is developing a new product or improving an old one, or if you are designing some software, then you qualify for this award.
- Understand the Process
There is a whole process that organizations have to go through to acquire these credit benefits. This process is one of the main reasons why small and start-up companies never get to enjoy the R&D Tax Credit benefits. Most, even when they are aware of such benefits, find it quite hectic to attempt the process, and find it quite expensive to hire someone who does. They, as a result, end up not filling the required forms to apply for the benefits. If you are conversant with this process, you will be in a position to help your company reduce existing as well as future tax liabilities.
- Save Money for Your Organizations/Business
Carrying out the R&D Credit Tax study enables you to save money for your organization. You can lower federal and state Tax significantly if you claim these credits and get as much as you possibly can. This allows your organization to save a lot of dollars that would have been paid as tax. You can spear this money back into the company for expansion. With a proper study of these tax benefits, you will also be in a position to know how you can actually carry tax credits for future use. This comes in handy when you claim a lot of credits but find your company running smoothly. Since you are never sure of what the future holds, with proper insight, you can opt to hold on to your credits and use them later. This insight can only be brought about by a proper study of this tax.
