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Leveraging the R&D Tax Credit in 2024

The Tax Relief for American Families and Workers Act presents significant opportunities for businesses, particularly those involved in research and development (R&D), to enhance competitiveness and drive innovation. By allowing immediate deductions for R&D investments, restoring full expensing for critical assets, increasing write-off thresholds for small businesses, and addressing various business-related expenses, the act aims to stimulate economic growth and job creation.

Revisions to Form 6765 R&D Credit

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On September 15, the Internal Revenue Service shared proposed revisions to Form 6765, “Credit for Increasing Research Activities,” requesting stakeholder comments by October 31. These modifications might result in significant changes to the R&D Tax Credit from 2024 onwards, adding to the hardship faced by taxpayers filing to claim the federal credit.   The agency […]

Leveraging R&D Credit For Small Businesses

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Is your company attempting to improve current goods, processes, or software? Do you create new goods and processes as part of your regular operations? Have you modified, integrated, or produced goods based on customer specifications? The Research and Development Tax Credit may effectively reduce taxable income while providing immediate support for future discoveries. It remains […]

IRS Provides Clarity on 2024 R&D Tax Credit

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In 2024, tax experts will face the difficult challenge of projecting future tax liabilities during an uncertain period. Some of the biggest concerns stem from the Tax Cuts and Jobs Act’s triad of business provisions and their future.   The end of 2025 is when bonus depreciation, amortization of R&D expenses, and the cap on […]

IRS Notice 2023 and How It Impacts R&D Tax Credits

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Today, the IRS has unveiled an early release of Notice 2023-63 , designed to offer preliminary guidance aimed at clarifying the application of section 174, as modified by Pub. L. No. 115-97, often referred to as the “Tax Cuts and Jobs Act” (TCJA).   This notice encompasses guidance on the following matters: 1. Capitalization and amortization of […]

How Automation Companies Need To Leverage The Most Significant Tax Credit

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With the onset of another tax season, firms in the automation and manufacturing sectors must assess how persistent economic and industry trends have impacted their profit margins and sustainability. Improving Supply Chains A study done in 2023 reveals that businesses have been stepping up their efforts to diversify and localize supplier networks to accommodate demand and conclude […]

Section 174 Reversal & the Renaissance of R&D: Overview of Current Congressional Bills

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Beginning with the tax year 2022, the TCJA changed Code Sec. 174 provisions to mandate amortization for some R&D expenses over a five-year period. Before this modification, taxpayers could write off these expenditures right away.   The elimination of the current-year SRE expenditure deduction will impose a significant tax penalty on many enterprises involved in research, engineering, manufacturing, […]

How Sec 174 Impacts R&D Companies’ Taxable Income

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Following the modifications to Internal Revenue Code Section 174 implemented by the Tax Cuts and Jobs Act (TCJA), specified research and development (“R&D” or “R&E”) expenses are no longer deductible beginning with the 2022 tax year. The elimination of the current-year SRE expenditure deduction will impose a significant tax penalty on many enterprises involved in […]

Companies Need to Amortize R&D Expenses

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The Consolidated Appropriations Act of 2023 was passed late last year by Congress. This bill included funding for the federal government for the remainder of 2023 but left out the highly-anticipated tax extenders like Section 174 amortization requirements. With these tax extenders not passing, many people don’t know what to expect now. Well our tax […]

7 Common Questions About the R&D Tax Credit

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The U.S. Research and Development (R&D) Tax Credit was created in 1981 as an incentive for businesses to take risks and undergo research activities to develop and improve their products, processes, or software. Through the Economic Recovery Act of 1981, the R&D tax credit offers reimbursement for business activities and resources that were utilized during research.  Navigating and understanding […]