What You Need to Know about R&D Tax Credits and Incentives and the IRS

Recently, there have been particular changes to the research & development tax credit and incentive system in the United States. Some states, like Texas, which did not have a proper R&D incentive program, have recently begun offering this once again, and there have been other changes brought about by the government to the R&D tax credit and incentive system that strive to make the process and documentation clearer and easier to understand than ever before.

But there is one misconception about R&D tax credit and incentives which has hampered many companies from taking advantage of this program: the misconception that claiming tax relief is difficult, especially when it comes to dealing with the IRS.

While it may be true in some cases that the IRS has rejected a company’s R&D tax credit and incentive claims, there may be varied reasons for this. But a company wanting to engage in R&D activities need not be daunted by the role of the IRS if they know that they have properly qualified according to the terms set by the government and their respective state.

R&D tax credits and tax planning: what is the relationship?

Research & development tax credits and incentives is a program developed by the government to support enterprises which aim to expand and improve their products and services through research & development activities. If a company can prove that it has incurred expenses which fall under qualified research, then it may claim R&D tax credits and incentives.

While some corporations may be involved in aggressive planning for their taxes in order to circumvent their tax responsibilities, a majority of corporations are not engaged in this type of tax maneuver at all. Tax planning which may be considered aggressive is when a company tries to look for a good tax position which may include certain strategies such as setting up accounts offshore and looking for tax shelters. But the good news is – the aggressive planning of taxes is not even related to what you can claim from your research & development activities.

While the regulations of the IRS may not always be at par with a company’s own, sometimes making it difficult for a company to claim tax credit and incentives, companies can always seek assistance from professional R&D tax specialists which can guide them through the entire process and make sure that they can effectively claim R&D credits without being rejected by the IRS and without having to develop aggressive tax strategies.

Why it pays to take advantage of the government’s research & development tax credits

For any company, big or small, start-up or long-established, it always pays to know how you can benefit from R&D credits. Why? Because it can help your enterprise grow and expand as well as keep up with an increasingly competitive world. With R&D tax credits, you can benefit from tax relief which allows your enterprise to save thousands every year.

With expert help, you can easily learn how your company can qualify for R&D tax credits in the US. The R&D tax credit specialists at Swanson Reed have years of experience under their belt – talk to them today and find out how your company can benefit from this program.

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