Help Your Indiana Business Save Big with R&D Tax Credits

Both the U.S. Treasury and the Indiana Department of Revenue give millions of dollars to qualifying businesses practicing research and development activities. Is your company cashing in?

While more and more companies are becoming familiar with the lucrative federal R&D tax credit program, many businesses are still unaware that many states also govern their own R&D programs, saving them an additional amount on their corporate taxes.

Indiana has been one of the most research and development-friendly states, with its own incentives. This is great news for Indiana state businesses who are dedicating resources to innovation.

The current version of the Indiana state R&D tax credit works as follows:

  • It allows a 15% credit on R&D investments increase over the base amount of $1 million. For example, a company that invests $100,000 in 2018 and $200,000 in 2019, they could receive a $15,000 credit on the $100,000 difference.
  • In cases where the difference in these two numbers is over the $1 million mark, companies can still apply for the R&D tax credit, but at a rate of 10 percent versus 15 percent.
  • If there are no previous research and development investments the previous year, the amount of the R&D tax credit the business can receive is five percent of the research investment expenses.

Once a business’s activities are deemed as qualifying, expenses can equal significant tax savings for the company. Additionally, employee wages and research expenses to an accredited entity such as a university can be sources of research and development tax credits. Indiana also allows a 10-year carryforward period for any unused R&D tax credits.

Through the federal R&D program, established companies can receive a dollar for dollar return of 10-15 percent of their research and development investments. Startup companies or small businesses that aren’t yet revenue-generating can also benefit from R&D by taking advantage of its payroll tax provision.

However companies qualify, all businesses must claim R&D tax credits in a manner that will withstand audit by the Indiana Department of Revenue as well as the IRS. At National Tax Group, we can itemize and capture credits for your company in time for the extended 2019 tax season. Call our business tax experts at (561) 257-3436 to schedule your free initial assessment and determine your eligibility.

Industry Spotlight: Cost Segregation for Auto Dealerships and Service Centers

Auto businesses such as dealerships and maintenance centers are unique properties with high overhead costs. Cost Segregation is a cost-effective strategy for maximizing these businesses’ tax benefits.

A Cost Segregation Study offers a great potential for cost savings for the auto industry, and may be one of the most valuable tax planning tools available to these niche businesses. These studies have great potential for improving your bottom line by relieving your overall tax burden.

Though many auto dealerships and service centers are leased properties, a Cost Segregation Study (CSS) can still benefit the lessee if he or she has invested in improvements to the property. These costs can be factored into the CSS and reallocated to accelerate the depreciation of these building elements.

What is a Cost Segregation Study?

Cost Segregation is a tax strategy that reclassifies a property from real property to personal property, therefore accelerating the depreciation of certain portions of your auto dealership from 39 or 27.5 years down to 5, 7 and 15 years. This increases your near term cash flow by reducing your overall tax liability, especially in the short term.

To perform a cost segregation study, you must hire a specialty engineer or national tax experts with engineers on staff to thoroughly survey your property, its building components, and blueprints. After this process is completed, your hired tax experts should walk you through the report and present the most lucrative options for you going forward.

What Auto Facility Features Can Qualify for Cost Segregation?

Auto facilities require high-grade professional equipment, large signage and expansive parking lots or storage space for vehicles. All of these building elements can be included in a Cost Segregation Study. Other auto industry building features that can qualify the business for a CSS are as follows:

  • Landscaping and irrigation systems
  • Indoor and outdoor signage
  • HVAC or air filtration systems
  • Oil, gas, fluid and waste piping
  • Compressed air systems
  • Car lift systems

A Cost Segregation Study might not always be the best fit for a company, but auto dealerships and car maintenance facilities are businesses with a high potential for cash savings using this little-known tax strategy. This service can be especially beneficial if the service center or dealership has recently undergone construction. The first step to starting the CSS process is to hire national tax experts with a thorough understanding of your business and how cost segregation could best benefit you.

National Tax Group not only has a team of tax experts available, but also engineering staff that can perform a CSS of your property at your earliest convenience. Call us at (561) 257-3436 to schedule a free consultation today.

Tap into Utah’s Hidden Cash with R&D Tax Credits

Utah’s R&D tax credits encourage companies to forge new ways to create and innovate. Is your company qualified for this lucrative tax incentive?

Every year, both the United States and the state of Utah give businesses billions of dollars as a reward for researching new products, investigating new services, and continuing to innovate across the state and country.

Companies in many industries can benefit from Research and Development tax credits. Taxpayers should not assume that only technology-based companies would qualify to receive this cash flow. Businesses from the agriculture, construction, textile and renewable energy industries could all qualify, depending on the activities they practice. Qualifying activities look different depending on each unique business, and should be thoroughly reported for possible audit by the IRS.

Through the federal R&D tax credit, established businesses can offset about 10-15 percent of the money they spend on a dollar for dollar basis. Moreover, businesses such as startups that have not yet become revenue-generating can use the R&D tax credit against their payroll taxes.

While Utah does not currently have a claimable Research and Development tax credit past the 2010 tax year, the state does advise that all businesses keep strict records of all related documents. According to the Utah state tax website, businesses that perform qualified research activities are entitled to the R&D tax credit, which is defined by the following:

  • 5% of qualified research expenses for qualified research activities 
  • 5% of some payments made to a qualified research organization located in Utah, such as a university
  • 7.5% of your qualified research expenses in Utah for the tax year

This record-keeping process can often be a complex and lengthy undertaking for many companies. However, even without a state Research and Development tax credit – the federal credit is still lucrative for Utah businesses.

At National Tax Group, our expert tax professionals can efficiently lead companies through the records process step by step. Furthermore, our team can determine if there are any additional credits your business can claim. Give us a call at (561) 257-3436 to schedule your free initial assessment.

Industry spotlight – R&D and the Food and Beverage Industry

Now more than ever is a good time for food manufacturers and production labs to take advantage of this tax credit as they face challenging times.

Competition in the food production industry has always been heavy, as food laboratories, production labs and manufacturers have needed to constantly evolve to clear new hurdles and keep up with the changing demands of their clientele. Many business owners operate with a constant eye on the bottom line because there’s a never-ending competition and challenge from others in the industry.

However, the 2020 tax extension has presented an opportunity for more food and beverage companies to apply for the Research and Development tax credit for the 2019 tax year and find opportunities otherwise overlooked. Businesses investing in new recipes, packaging, formulas or processes can reward themselves with this lucrative cash flow infusion for activities that they are already doing. Companies that develop and improve food and drink products, packaging and processes can apply for a dollar-for-dollar reduction in their tax liability.

Qualifying research activities include:

  • Improving the shelf life, taste, or nutrition of the food or drink
  • Updating processes to comply with new legal and regulatory changes
  • Modernizing lab equipment to improve the safe handling of food products
  • Executing more energy-efficient processes that save water, fuel, and utilities
  • Packaging food or drinks in more sustainable ways

More and more customers are opting for online shopping in the twenty first century, and this provides new opportunities for food and beverage industries to implement technology. For example, creating a mobile app may not only qualify businesses for R&D tax credits, but can also give them an advantage over competitors. Presence in the mobile space provides easy communication between businesses and their clientele. Other examples of food and beverage companies using technology are new software implementations, technology consultations with a firm or professional, and automation of various processes.

To sum up, the Research and Development tax credit has a broad definition and provides many opportunities for food producers, packers, and processors to receive a generous tax credit. If you think your business qualifies for R&D tax credits, contact our expert tax professionals at (561) 257-3436 to schedule your free initial assessment.

Easy Ways to Make your Properties Energy Efficient and Take Advantage of the 45L Credit

Eligible contractors and home builders’ savings add up when their constructed or renovated residences meet the energy-efficient threshold.

Extended through 2020, the 45L tax credit is a lucrative and often unknown tax benefit that can quickly add up to cash savings for professionals in the building and construction industries. This credit is also known as the Energy Efficient Home Credit. Under this provision, all developers, contractors and property owners who qualify can receive a $2,000 tax credit per unit in their energy-efficient property.

Energy improvements help reduce a property’s carbon footprint, and the government rewards professionals that take these steps to be more environmentally-friendly. In addition to being better for the earth, energy-efficient homes often lead to cost savings down the line for the owners or renters who inhabit the building.

Benefits of an Energy Efficient Building:

  • Greater resale value and return on investment
  • Better protection against weather, such as heavy rain, snow or hail.
  • More noise reduction between units and adjacent buildings
  • Improved indoor air quality, which can lessen residents’ allergy symptoms
  • Less noise pollution from appliances such as HVAC units and laundry machines
  • Greater savings on electric, gas and/or water bills

Not only can you claim the 45L credit for the 2019 tax year, but you can also spread out your credit over past years. For example, if you own a residence with 50 units and qualify for a credit that reduces your total tax liability below the Alternative Minimum Tax for 2019, you do not have to leave money on the table. With the help of National Tax Group, you may be able to redirect the credits to the 2018 tax year and carry it forward up to 20 years.

The 45L credit can also apply to residential properties that are currently under construction, or to properties that have been renovated in order to become more energy efficient. We can help you determine if a dwelling qualifies by setting up an inspection with an accredited or authorized RESNET certifier. This is a key eligibility requirement for applying for your 45L credit. Our team cannot only assist you in claiming this year’s tax benefits, but we can also retroactively claim your credits up to three tax years.

Advantages of the 45L Credit:

  • Substantial value for the applicant
  • Creates fewer energy demands
  • Appealing tax status for future investors

National Tax Group can help determine if your properties would qualify for 45L or other tax incentives. Contact us at (561) 257-3436 to contact our quality tax group and learn more.

Don’t Submit Your Tax Returns Before Talking with National Tax Group

The corporate tax deadline has been extended. How can you optimize your benefits?

The IRS’s recent extension of the tax deadline means many businesses have an unexpected opportunity to reanalyze their taxes and determine if they are missing out on any lucrative benefits. Becoming tax credit savvy is not something you have to do on your own; an experienced team of national tax experts can guide you through the process

Many taxpayers submit their taxes without the knowledge that they qualify for lucrative credits. Our expert staff includes specialty engineers, tax accountants, and other technical advisors. We’ve partnered with businesses across many industries such as software development, commercial building property owners, architecture, manufacturing, technology, to help our clients gain the maximum amount of tax benefits they deserve. Does your business qualify for any of these specialty tax rewards?

Cost Segregation: A Strategy with Potentially Monumental Savings

  • Increases short-term cash on hand by separating all building elements that can be depreciated over 5, 6 and 15 years
  • Interior features, such as plumbing, as well as land improvements, such as parking lots, are included in the benefit 
  • A survey of all property components must be completed by a qualified tax engineer

179D: Deductions for Energy-Efficient Commercial Buildings

  • Open to builders and property owners that construct qualifying dwellings or make energy-friendly improvements to current buildings
  • Buildings must reduce energy consumption by 50% 
  • $1.80/sq. ft. can be deducted for new or existing buildings that meet all requirements
  • $0.60/sq. ft. can be deducted for if buildings meet partial requirements

45L Credit: A Tax Benefit for Energy Efficiency

  • Rewards property owners, contractors and developers who build or renovate commercial buildings that meet energy-saving requirements 
  • Property elements must reduce energy and power costs by 50%
  • Energy analysis must be completed by an authorized RESNET certifier
  • A $2,000 per dwelling credit can be claimed for current tax year as well as retroactively up to 3 tax years

Research & Development: Tax Credits for Innovation

  • Rewards companies for practicing innovative activities within the United States
  • Eligible activities aim at improving products and technology
  • A wide range of industries can claim the R&D tax credit
  • Eligible companies can also claim against payroll taxes

National Tax Group is your trusted partner in maximizing your tax returns. If you think your business qualifies for any of these tax savings, call National Tax Group at (561) 257-3436 to start your free analysis and take the first step to reexamining your significant tax savings.

Connecticut’s Often Overlooked R&D Tax Credit Offers Big Savings for Businesses in Times of Economic Instability

Not only can corporate taxpayers benefit generously on a state level, but also on a federal level, thanks to this comprehensive nationwide program.

Businesses all over the United States are fearing future economic uncertainty following the continuing Coronavirus pandemic. What many company owners in Connecticut and nationwide may have overlooked is the Research and Development tax credit, a lucrative tax incentive that offers dollar-for-dollar returns on qualified activities. Now is a particularly good time for companies to reexamine their 2018 taxes and determine where they may have left some money on the table, since the IRS has extended the corporate tax deadline to July 15, 2020.

In Connecticut, businesses that invest in research and development get rewarded for their innovation and risk-taking by getting a tax reduction on both federal and state taxes. State companies of all sizes are eligible for incremental and non-incremental tax credits. To calculate the tax credit amount for Connecticut state, multiply the amount invested on research conducted in Connecticut by the appropriate percentage. A qualified tax expert can lead you through the process to claim this lucrative perk. More detailed information can be found here.

National Tax Experts Can Help You in Claiming R&D Tax Credits in Connecticut By Assisting You With:

  • Compiling a comprehensive summary of your company’s research activities, including tax year, expenses and locations
  • Cataloging your total research expenses
  • Itemizing all methods used to calculate your research and allocated expenses
  • Indexing the wages of each employee that practices qualified research for your company
  • Completing the appropriate tax forms

Qualified Research Expenses (QRE) include:

  • Conducting qualified research trials
  • Investing in supplies for the development of new products or processes
  • Practicing qualified research activities
  • Directly assisting and providing oversight of qualified research activities
  • Purchasing supplies that are directly related to the qualified research

The R&D credit was originally enacted in 1981, and in 2015, the Protecting Americans Against Tax Hikes (PATH) Act made it permanent. The PATH Act also broadened the nature of industries that are able to claim the credit. Manufacturers, engineers, software developers, and food and beverage distributors are just some of the professionals that can apply for the Research and Development tax credit in Connecticut.

Contact National Tax Group at (561) 257-3436 to claim your free R&D tax credit assessment. During your call, we’ll determine if your company’s research activities qualify it for the Connecticut R&D Tax Credit Program.

New Jersey Business Owners Can Save Big with Research and Development Tax Credits

Garden State companies that invest in technology or other innovative practices can see significant rewards on their taxes.

For business owners in New Jersey, juggling the tasks of leading, delegating and managing requires both business savvy and a quality tax group partner. Leaders in industries such as service, construction and engineering should investigate how to maximize their tax savings. One of these potential cash flow options is the Research & Development tax credit, which is a federal and state tax benefit.

According to the New Jersey state website, this credit is calculated the same way as the federal tax credit; it provides a credit of 10 percent of research expenditures over a specific set amount, plus 10 percent of research payments that companies may provide to an educational institute. One big difference between New Jersey state R&D tax credits and those in other states is that only S and C corporations can apply. Partnerships and pass-thru entities are excluded.

As of 2018, the New Jersey tax benefits also included the Alternative Simplified Credit (ASC), which many company owners and taxpayers supported. New Jersey’s ASC tax credit is calculated following the federal ASC calculations, where the base amount is 50% of the previous three-year qualified research expenses, averaged. However, there are a few changes that are specific to the state, which a qualified R&D tax expert can review with companies on a case by case basis.

The first step to applying for a Research and Development is to speak with an industry professional so he or she could perform the Four-Part qualifying test.

The Four-Part Test defines R&D activities as the following:

  1. The activity creates a new or improved business element of function, performance, reliability, or quality.
  2. The activity is technological in nature and under the umbrellas of computer science, physical or biological science, or engineering.
  3. The activity eliminates uncertainty in capacity, process, or design.
  4. The activity should include a process of experimentation or evaluating one or more alternatives to achieve a result. This might include blueprints, prototypes, or calculated trial-and-error.

Call National Tax Group at (561) 257-3436 to start your free four-part test and take the first step to significant tax savings.

National Tax Experts are Helping Business Owners Attain Critical Tax Credits

During the COVID-19 pandemic and times of economic uncertainty, lucrative tax benefits could make a difference in the future welfare of a business.

The current Coronavirus crisis has business owners in a financial predicament as businesses have closed down until state governments decide to open doors. The timeline for these mandates are uncertain, and until then, many company owners are waiting in the wings while their monthly expenses persist.

In response to the COVID-19 pandemic, the IRS announced a national tax extension to July 15, 2020. This move was an effort to offer financial assistance for millions of citizens and businesses who need to delay their tax filing and payment.

The tax extension is a key relief effort that business owners can take advantage of. In addition to the tax extension, hiring a quality tax group to analyze the company’s potential tax benefits can make the difference between financial certainty and financial struggle.

What should you look for when selecting a quality tax group? Consider the following:

  • Has the tax company worked in your state? Tax benefits vary from state to state, so it’s important to hire national tax experts that can work within a variety of state and federal constraints to maximize your benefit.
  • Does the tax group have specific experience in your industry? Some businesses will benefit from credits, while others should apply for a more itemized approach. Ask your consultant which is best for you and why.
  • Is their online reputation positive? Knowledge is important, but service is key. Hire tax experts that can lead you step by step while navigating the complexities of your business returns.

National Tax Group has worked with business owners all over the country, and our specialists are familiar with the intricacies of each state’s tax laws. Moreover, we create a customized approach for each client to maximize your tax benefits and provide the best service possible. Read our testimonials to find out more about our clients’ positive experiences working with our team of experts.

Many companies qualify for significant tax savings for the activities they are already doing; owners simply don’t know how to leverage this work into cash flow. To ensure you are receiving the tax benefits that are owed to you, call National Tax Group at (561) 257-3436 for a free initial consultation. We help businesses succeed by strategizing the best approach to their taxes.

Massachusetts R&D Tax Credits: Are You Missing Out?

This lucrative credit program offers tax incentives for research and development investments on both the state and federal levels.

It’s no secret that companies in various industries now rely on technology to get the job done. Traditionally, this translated to computer or lab work, but over the last two decades, leaning on applied science or innovative strategies has become a widely used practice.

In Massachusetts, businesses that invest in research and development are eligible for a state and federal tax credit. In-state, the credit is divided into two categories: a 10% credit for qualifying costs and a 15% credit for basic research payouts to colleges, hospitals, or other research institutions. In addition, tax credits in excess of the company’s liability may be carried over for 15 years according to the Massachusetts state website.

R&D activities that Massachusetts companies may already be implementing include:

  • New and unique processes
  • New consumer products
  • Creation of prototypes
  • Testing and design improvement
  • Patent acquisition

The companies that can benefit from the R&D tax credit in Massachusetts span a variety of industries. Manufacturing, architecture, food & beverage, construction and technology companies are all encouraged to apply under the guidance of R&D tax professionals. Pairing with an experienced tax expert is key to navigating the application’s legal language and ensuring you receive the largest tax credit possible.

Contact National Tax Group at (561) 257-3436 for a free estimate of your company’s Massachusetts state and federal R&D tax credits.