How to Get the Most Out of Your Research & Development Tax Credit
One of the many reasons why the United States is a global leader in science, technology, and innovation is the Research & Development Tax Credit offered by the US government. The program involves a series of tax credits that offer financial relief to companies that are on the cutting edge of technology. If your business is doing exactly that, then it is time to take full advantage of the research and development tax credit. Here are just a few ways to make the absolute most of those R and D tax credits so you can help your business innovate faster and take products to market more quickly.
1. Gear Your Research to What Can Be Credited
While the tax credit program is robust, it does not extend to absolutely every kind of research and scientific inquiry. It focuses instead on a few major industries that can help change the world and innovate how we do things. To that effort, the absolute best and easiest way to make the most of the tax credits available is to ensure that your research is in the areas that are eligible.
What you can research is subject to guidelines, but how you do your research is also subject to certain guidelines. The government requires that all businesses taking advantage of the research and development tax credit must follow four key criteria: a clear and permitted purpose, an elimination of uncertainty in the research techniques, a detailed explanation of the research process, and a technological nature behind the research and discoveries. By sticking to the guidelines, you have a much better chance of getting the most out of your research, and your tax credits.
2. Hire Professionals
You probably have accountants for your books so you can take advantage of every tax program you can. It’s a responsibility you have to your company to do so. The same approach should be taken with your research and development tax credit. Without professionals helping you discover the many facets of research and development tax credit, you could end up missing out on its full potential. That is why you should call up the professionals, like the talented financial professionals at Swanson Reed, to help you and your business maximize your research and development tax credit.
3. Think Ahead
One of the beautiful things about the research and development tax credit is that it provides you and your business with a stable, reliable source of financial relief. The tax credit is almost like a salary: a predictable income source on which you can rely, and one that, when it comes to your business, can help you plan for the future.
On top of gearing your research to what is included in the tax credit, move some of your resources to departments that will speed up the processes between research and putting a product to market. By reorganizing your assets based, in part, around what you will receive as part of your research and development tax credit, you can streamline your entire company and, as a result, start selling things on the global marketplace much faster.
Maximizing your research and development tax credit is about moving forward—not simply figuring out your present situation—so start planning for the future! Contact us as Swanson Reed today to get started.