When companies are rewarded for research spending through tax incentives, businesses can expand and grow.
Many companies across a variety of industries perform R&D activities – some without even knowing it. This specialty tax benefit is available on the federal level, as well as on the state level. As of 2006, 32 states now offer their own R&D tax credits. Now more than ever, innovation is a key component of the American business landscape. Research and Development tax credits have become a key strategy for minimizing tax liability and ensuring there are funds for small, medium and large companies to reinvest in future research practices.
According to a recently published a study on the effect of R&D tax credits on businesses from MIT, the R&D tax credit fuels high-quality growth, especially in new and smaller businesses on the state level. MIT economist Scott Stern states, “The R&D tax credit is one of the few innovation policy instruments that at relatively low administrative cost, can make a big difference for spurring innovation and entrepreneurship within a region.”
A Cost Segregation Study is a look back in its own right. Performed by a specialty tax engineer, a property and its building elements are surveyed closely to adjust their depreciation timelines as needed. This process can be greatly beneficial to the property owner, as it has the potential to unlock otherwise unused capital. After a study is performed, building owners can see a substantial increase in their building’s cash flow through these significant tax savings.
Both new and established properties can benefit from CSS. In fact, properties that were in service as far back as January 1, 1987 are qualified. Furthermore, property owners can request a tax amendment past the three-year look back statute, and changes can be made without filing an amended return.
R&D Benefits Companies Now and in the Future
Prioritizing new concepts and processes in the workplace creates an environment that encourages change, flexibility, and adaptation. Innovation draws talent, and an inventive environment can increase the number of company employees with high skill levels. A first-rate staff, along with continuous research, can allow a company to achieve
long-term sustainability and sustainable growth over time. Furthermore, companies can use their R&D tax credits to reinvest in more high-quality specialists, continuing the cycle of innovation.
Research and Development tax credits can also be reinvested into more new products, processes, and services. Better technology and product development benefits not only companies, but also their consumers. When businesses qualify for R&D credits, they can then turn around and reinvest into intellectual property conception, prototype production, formula creation, hiring qualified specialists and more. These tax benefits are especially beneficial to ambitious start-up companies and small businesses.
Businesses Looking Ahead Should Consider Specialty Tax Credits
At the end of the day, receiving Research and Development tax credits will allow business owners to more easily attain the innovative activities and high caliber employees needed to continue to be at the forefront of their respective industries. Contact National Tax Group Research and Development tax credits to start the process of obtaining your lucrative tax incentives. Contact us at 561-257-3436 for your free assessment today.