Are Your Tax Perks Expiring?

The current Congress may have some work to do in it’s remaining days before the transition is complete.

This year’s closing session in Congress will be one of the busiest in recent years. One of the big-ticket items to be decided is whether to extend various tax provisions that are set to expire as 2020 ends. One legislative possibility to avoid the expiration is a consolidation of these extender bills into one large Coronavirus relief bill in order to get them all passed at once. December 11th will be the first chance to pass the tax extender.

Another option is for lawmakers to come to a bipartisan agreement to permanently extend these provisions. This was accomplished previously in the PATH Act of 2015, which made the R&D Tax Credit and expansions to refundable tax credits part of permanent law. This could serve as a model for legislation before the Biden presidency begins.

We will be watching these tax extenders closely to keep our customers and readers up to date.

Optimize Your Benefits and Stay Ahead of Tax Laws

You may have additional questions about how new legislation will affect the 179D Energy Efficient Tax Deduction and the 45L Energy Efficient Home Credit. Our team of tax professionals can address any questions or concerns, and provide you with a free assessment to set you up for the new year.

Beware of PPP Pitfalls in the R&D Tax Credits

For those who took advantage of the Paycheck Protection Program (PPP), the way R&D Tax Credits are calculated for the 2020 tax year will be different from years past, and this may affect businesses.

The IRS has issued a notice that could significantly affect the way R&D tax credits are claimed for 2020. Under the CARES Act, PPP forgiveness was to be “excluded from gross income.” However, in Notice 2020-32, the IRS determined that other eligible expenses, paid for with PPP forgiveness proceeds, cannot be claimed for deduction. Potentially, leading to necessary adjustments in the calculation of the federal and state Research and Development tax credit.

The Many Ways 2020 Has Affected Businesses

It’s no question that businesses of all sizes and industries had to pivot this year in reaction to the global health crisis of COVID-19 and the subsequent global recession that followed. Many office teams are still operating remotely, and this is where the changes regarding R&D tax credits will come into the forefront.

The Research and Development tax credit is a dollar for dollar tax credit that rewards companies for investing in Qualified Research Activities. A notable share of Qualified Research Expenses (QREs) are employee wages.

We can see how this may play out in two vastly different ways. For example, Company A that had to shut down and send their employees home for 6 months may have lost out on valuable time that employees would have normally spent conducting Qualified Research Activities. On the other hand, Company B may have overhauled its operations to a remote work model during 2020, and could have higher Qualified Research Expenses to report for even more R&D tax credit potential.

R&D on Capitol Hill

Earlier this year, members of Congress wrote a formal letter to Secretary of the Treasury Steven Mnuchin stating they were not in agreement with his legal interpretation of the law. These two bodies are usually in accord, so the current IRS interpretation is expected to change to fall in line with Congress. However, all businesses should brace for the change as currently stated in the IRS literature.

How to Maximize Your Tax Return

Navigating the world of specialty tax benefits is not an easy task for most business owners. Given the changing tax provisions and consequences, it is advised that companies partner with a specialty tax group that can maximize their savings. If you are considering claiming R&D tax credits for the next tax year, trust our tax experts. Call National Tax Group at 561-257-3436 to start your free assessment.

Earn Commission While Your Clients Save on Taxes

Follow our lead – your clients can earn back they spend through specialty tax credits.

While more and more companies are looking for new streams of revenue in today’s competitive market, National Tax Group has partnered up with CPAs all over the nation to get more money in the hands of American business owners.

Our CPA Partnership+ program follows a two-pronged approach: First, CPAs collaborate with our team of tax professionals to offer their clients even more tax breaks and strategies. Next, we reward our CPA partners with generous commissions.

Our Specialized Tax Saving Services

  • 179D Energy Efficient Tax Deduction – Building owners and architects that take steps to reduce their recently acquired, built, or renovated building’s energy and consumption can reward their efforts with significant tax deductions of up to $1.80 per square foot.
  • Research and Development Tax Credit – This is one of the most underutilized and lucrative tax credits and is increasingly out of reach for small to medium-sized businesses without the help of a specialized tax expert. The Research and Development Tax Credit was created as an incentive for companies across various industries to take innovative steps through qualifying research activities that improve products, processes, and software. Companies can use the credits obtained to offset the costs spent performing the research activities.
  • Cost Segregation – Through this engineering-based study, buildings are examined, and all assets are classified into depreciated property life. Hidden capital will be unlocked, releasing cash flow that can be invested right back into the business. Any building that has been upgraded can have a study performed, even if they’ve had one done before renovations.
  • The 45L Energy Efficient Home Tax Credit rewards eligible contractors for installing energy-saving elements to newly constructed single-family homes and low-rise residential buildings in an effort to reduce energy and power costs. Qualifying properties can obtain $2,000 per unit in credits.

We Offer a Significant Commission Structure for CPA’s

Broaden your reach by partnering with our industry-leading firm. For each client that saves with us, we reward you with commissions for the referral. It’s a win/win/win.

$100 – First Referral
5% Commission – $0-$50K in Generated Fees
7% Commission – $50k-$100k in Generated Fees
10% Commission – $100k+ in Generated Fees

The Difference the National Tax Group Team Makes

We understand that claiming our specific tax incentives can be daunting. That’s why we have a dedicated support team of tax professionals that will walk you through our client process, and send you all the information you need to familiarize yourself with our specialty tax incentives. Our partnered CPAs obtain upwards of 10% commission off generated client fees. Your commission will grow as the amount of savings we obtain for clients grow.

Benefits for CPAs & Clients

We pair each CPA with one of our tax professionals, who makes the tax-saving process simple and straightforward. We’ll work hand in hand with you to determine which of our specialized tax services your clients can obtain and go through the tax-saving process together. Click here to get started.

Hotel Owners Are Raking in Massive Tax Deductions

Cost Segregation Studies are the key to lucrative tax benefits for the hospitality industry.

Hotel owners that have performed a Cost Segregation Study (CSS) on their property are aware of the lucrative savings on the other side of this tax strategy. Not only can CSS benefit owners of newly constructed hotels, but it can also greatly benefit property owners with buildings constructed, purchased or remodeled after 1987.

The study identifies fixed assets and their costs, determines areas of savings, and unlocks otherwise hidden cash flow that can be invested directly back into the business. This can be especially beneficial when a business is in its early days, as more cash on hand, lower business credit risk, and lower insurance premiums are all possible perks of the study.

Tap Into Your Hotel Building Savings

Cost segregation leads to increased cash flow by accelerating deductions and deferring federal and state income taxes. The study restructures the depreciation of commercial properties by re-classifying assets from a 39-year depreciable life to a 5, 7, or 15-year depreciable life. Our team of engineers are certified in all 50 states and are prepared to help you obtain top-dollar savings.

Hotel Assets for Personal Property Can Include:

  • Electrical Systems – Circuit breaker panels, transformers, branch circuits and meters.
  • Power Generators – Thermal generating plants, cogeneration, nuclear plants, fossil-fueled, combined-cycle and biomass plants.
  • Decorative Lighting – Hanging light fixtures, chandeliers and pendants, wall sconces and wall lights, and accent lighting.
  • Plumbing Systems – Plumbing drainage venting, fuel gas piping, potable cold and hot water supply and hydronics.
  • Flooring choices – Hardwood, engineered wood, laminate, cork and linoleum.

The Difference the National Tax Group Team Makes

A cost segregation study is one of the most overlooked, yet most profitable choices a hotel owner can make. Our team of experts has teamed up with hundreds of hotel owners to enhance their savings and increase their cash flow. Are you ready to save significant tax dollars? Contact us today for a free assessment of your assets.

The R&D Tax Credit is the Game Changer for the Manufacturing Industry

Businesses can use the dollar-for-dollar credits to reinvest in the products and processes that turn a profit.

As the third-largest manufacturer in the world, the United States manufacturing industry employs over 12 million people. Companies in this field face a competitive market and are constantly innovating ways to manufacture more efficiently and save money. This can include automating computer and electronic processes, eliminating waste, reusing waste material, creating new formulas and more.
The federally-sponsored Research and Development tax credit gives manufacturing businesses an opportunity to explore new ways to improve their daily activities with both Qualified Research Expenses (QREs) and Qualified Research Activities (QRAs).

Some Manufacturing Activities that qualify for R&D:

  • Hiring technicians, engineers, chemists, and analysts
  • Developing energy-efficient processes
  • Researching new ways to reduce waste
  • Testing ways to extend product preservation
  • Developing more efficient travel processes
  • Innovating new fabric combinations for comfort
  • Prototyping, designing and developing models

Manufacturing companies must continue their research and development efforts to keep up with the rest of the market. By enhancing innovation, they not only become leaders in the field, but they also get handsomely rewarded with Research and Development tax credits.

Why Choose National Tax Group?

National Tax Group is here to help you claim all of the incentives your business qualifies for. Our tax experts can help you determine if your business activities meet the necessary criteria of the test by conducting a free initial assessment.

Eco-friendly Moves to Save Builders Tax Money

Reducing energy use has big payoffs for businesses that build and renovate.

Earth-friendly materials, products and processes have now been around for decades, and their popularity isn’t slowing down. Many contractors and builders have adopted these “green” principles and adapted their practices to reduce their carbon footprint. In addition to the positive effects on the environment, enacting these standards has also had a positive impact on businesses’ bank accounts.

Energy-Efficiency Pays Off on Your Taxes

Often, eco-friendly options are a more expensive investment for companies of all sizes. The federal government acknowledges this, and has tax laws in place to reward businesses for their investment. The IRS offers credits and deductions in specialty areas of the tax code that builders can use to offset their costs and invest back into projects or business costs. There are two types of energy-efficiency incentives:

179D Energy Efficient Tax Deduction

Who is it For? Architects, contractors, builders, commercial building owners, and anyone who does government-funded projects.
What are the Perks? A deduction of up to $1.80 per square foot per project.  You can read more about this deduction here.
How Do I Cash In? Qualifying for 179D requires an independent, third-party firm to evaluate the building’s components and detail the energy savings. Partner with tax experts can confirm your eligibility for this tax reward.

45L Energy Efficient Home Credit

Who is it For? Multi-family developers, contractors, and owners who build or upgrade projects to include energy-efficient systems or features, such as an envelope structure that reduces electricity use.
What are the Perks? A credit of up to $2,000 per qualifying dwelling. You can read more about this deduction here.
How Do I Cash In? The first step toward applying for the 45L credit is a detailed energy analysis that must be certified and documented by a third-party licensed professional. A Qualified tax professional can walk you through this process so you’re one step closer to claiming your reward.

Are You Taking Advantage of Your Rewards?

Obtaining top-dollar benefits from specialty areas of the tax code is National Tax Group’s top priority. Our assessment of benefits is always free. We’ll work with you to determine your eligibility and then provide all documentation needed to obtain these energy-efficient based tax incentives. Discover your savings with a free assessment.

Money-Saving Strategies for Your Best Year Ever

Use these tax tips to increase your savings and minimize the amount of federal income tax you’ll pay in 2021 and in years to come.

Business owners have not forgotten the stress of balancing the books or digging through files to get the necessary tax preparation paperwork. There are less than 73 days left in 2020 – have you gotten ahead on next year’s business taxes? Our tax experts outline three valuable tax strategies you need to adopt before the holiday rush, so you can get organized and save money in the process.

  1. Determine Which Specialty Tax Benefits Your Business Qualifies For

    What you don’t know can hurt you. Every year, the US Treasury awards tens of millions to companies across the country for research and development work, energy efficiency efforts and more. If you don’t know what your business qualifies for, take a look at four corporate tax opportunities below.

    Specialty Tax Perks for Businesses:

    Cost Segregation

    Research & Development Tax Credit

    45L Energy Efficient Home Credit

    179D Energy Efficient Tax Deduction

  2. Plan Next Year’s Hiring Numbers

    Staff wages and activities are handsomely rewarded through state and federal Research and Development tax credits. If you anticipate your staff growing, you can take the opportunity to leverage your employee wages for tax credits as your company expands.

    One important aspect of the R&D Tax Credit is the ability for it to integrate payroll taxes into the final tax credit. For many businesses and startups, this is especially valuable, because it gives them capital that they can then reinvest back into their staff, activities and overhead costs.

  3. Organize New Property or Renovation Paperwork

A Cost Segregation Study reclassifies some aspects of a property to be depreciated more quickly, translating to big savings for owners. In fact, up to 40 percent of the cost of any commercial building has the potential to be reclassified. This is why this engineering-based tax method has saved our clients tens of thousands of dollars they didn’t even know was available. Thoroughly organizing your property paperwork will help you start the process of this highly lucrative tax strategy.

Meet With a Tax Expert

To truly receive personalized advice about your particular business and industry, have an in-depth conversation with a professional. Our team has worked with hundreds of businesses to enhance their savings and increase their cash flow. Contact us at 561-257-3436 to sign up for your free assessment of benefits.

45L is the Tax Saving Secret Building Owners Don’t Want to Miss

Earn $2,000 per unit under this lucrative tax perk for commercial property owners.

Builders, contractors and owners should make the 45L credit part of their construction and remodeling practices. 45L, also known as the Energy Efficient Home Credit, is an underused tax perk that can result in a lucrative outcome for those who apply.

Housing that Qualifies for 45L:

  • Single-family homes
  • Condominiums
  • Student Dorms
  • Assisted Living Communities
  • Townhomes
  • Apartments

Buildings under construction can also redeem the 45L credit, as long as it will reduce heating and cooling energy use by at least 50%, and has a building envelope structure that accounts for at least 20% of this reduction.

A Closer Look

Let’s look at how 45L can benefit building professionals in the real world. Assume Company “A” built a low-rise assisted living facility in Boca Raton, FL in August 2019. The building is 3 stories tall with 150 units total. Company “A” owned the property during the construction phase, which qualifies it as an “eligible contractor” that can apply for 45L. Since each unit is worth $2,000 in tax credits, and the property contains 150 units, XYZ Company is in a position to receive a tax credit of $300,000.

Assuming an additional 30 units will be completed three months later, Company “A” can also claim these new units through the 45L credit, receiving an additional $60,000, for a total tax credit of $360,000. The federal depreciable basis of the assisted living facility would also be reduced by $360,000. For companies with multiple properties, the savings multiply greatly.

Take the Next Step in Savings

Our tax experts specialize in niche tax areas such as the 45L Energy Efficient Home Credit, so that you can leverage for your biggest return yet. Contact us for a free assessment of your properties.

Medical Startups Can Earn $250,000 in Tax Credits

Young companies in the medical field can claim the lucrative and often overlooked Research and Development tax credit to earn big.

Entrepreneurship can be an adventurous career path. Many medical startups experience growing pains such as staff turnover and debt that hinders business growth. To help businesses thrive, it’s important for entrepreneurs and stakeholders to be informed of federally-sponsored tax opportunities. Currently, the U.S. Research and Development tax credit can put hundreds of thousands of dollars back into the pocket of medical companies performing innovative activities.

What is the R&D Tax Credit? What is the R&D Tax Credit?

The Research and Development tax credit was created by the U.S. government in the 1980’s to support innovation in businesses and to reward them for performing research activities in the country. The credit can be used to offset costs spent during the research and development processes.

At first glance, medical startups appeared to be perfect applicants for this tax credit, as many of these companies generate new products or processes. However, because most startups do not generate revenue during their first several years in business, they were disqualified from receiving any R&D tax credits.

This changed in 2015 when The Path Act extended R&D to include and benefit startup companies and small businesses. These companies now have the power to offset as much as $250,000 against payroll tax liabilities each year.

How Do I Know if I Qualify for Vermont’s R&D Tax Credit?

To claim both the state and federal R&D credits, your company must be a C-Corporation, S-Corporation, LLC or Partnership that performs Qualified Research Activities (QRAs). To be deemed a QRA, business activities must pass the IRS’s 4-Part Test.

How Medical Startups Can Qualify for R&D

To qualify for the Research and Development tax credit, medical startups must meet the following criteria:

  • Startups must have gross receipts of less than $5 million for the tax year that they’re filing in
  • Startups must have gross receipts for five years or less.
  • Business cannot have any gross receipts further back than 5 years
  • Startups cannot be a tax-exempt organization under section 501

How National Tax Group Can Help Your Startup

Our tax experts have 20+ years of experience helping medical startups and businesses leverage their highest tax returns. Call National Tax Group at (561) 257-3436 to see if your startup qualifies for a lucrative R&D tax credit. Your initial assessment is always free.

Vermont Businesses Can Leverage Their Innovation into Big Tax Savings

The US Treasury supports businesses across the Green Mountain State with tens of millions of tax dollars each year. Did you get your share?

Agriculture, production and manufacturing are some of the largest industries in Vermont state. While each of these industries are different, what they do have in common is that they can all leverage their everyday activities to receive a substantial dollar-for-dollar return through the R&D Tax Credit. Unfortunately, many businesses do not know that what they do day in and day out can translate to huge tax credits.

The state of Vermont provides significant tax credits for companies improving processes or products within its borders – and your company could be one of the businesses to reap the benefits.

Vermont’s R&D Program – What Businesses Should Know

Vermont’s Research and Development tax credit is modeled off of the US’s federal program. In fact, a prerequisite of obtaining the Vermont state tax credit is to be qualified for the federal R&D credit.

According to the Vermont state website, the Vermont credit can be taken in an amount equal to 27% of the federal tax credit for the corresponding taxable year. This credit applies to personal income tax or business or corporate income tax.

How Do I Know if I Qualify for Vermont’s R&D Tax Credit?

To claim both the state and federal R&D credits, your company must be a C-Corporation, S-Corporation, LLC or Partnership that performs Qualified Research Activities (QRAs). To be deemed a QRA, business activities must pass the IRS’s 4-Part Test.

Qualifying R&D Activities Include:

  • 3-D printing
  • Designing and testing prototypes
  • System software development
  • Creating new formulas to ensure shelf life longevity
  • New agricultural product development
  • Designing and improving manufacturing processes

What is the First Step?

The first step you can take to receive your credit is to call a qualified tax group. Pairing up with experienced tax professionals makes the task of gathering proof of qualified research expenses, compiling past federal taxes and assembling additional paperwork that much easier.

At National Tax Group, we help you tackle the process of qualifying for this credit. Hand in hand, we guide you through the process of receiving your credit so you can increase your potential cash flow as soon as possible. Give us a call at (561) 257-3436 for your free qualification assessment.