NewswireToday - /newswire/ -
South Walpole, MA, United States, 2010/10/11 - Companies across the U.S. often fail to claim valuable research and tax credits eve though they qualify. Typically, companies qualify across a wide range of industries, including fabrication, engineering services, architecture, tool & die, etc.
Misconceptions Regarding R&D Tax Credits – Tax Point Advisors
Research and development tax credits are an often overlooked opportunity for CPAs to bring value-added service to their clients. Many clients who qualify today for Federal and often state R&D credits are thought of as too small or not in the “right” industry for R&D credits. Recent R&D studies by Tax Point Advisors have resulted in six figure credit yields – and cash refunds – to clients with revenues as low as $5m annual sales.
There are many misconceptions regarding R&D incentives that the U.S. Federal and numerous states offer to taxpayers. As a general rule of thumb, though, if your client has introduced a new or improved product, has implemented a new or improved process, or even simply does customized work for their customers, chances are good that they have expenses that qualify for these valuable incentives. Tool and die shops, fabricators, package designers, food products and processors, furniture makers, engineering service firms, architectural firms, and many other clients who typically didn’t qualify under older, more strict R&D credit rules now do qualify and are enjoying significant six figure and even seven figure cash refunds.
The process of finding out to what degree your client may qualify is where Tax Point Advisors can help. We work with our CPA partners to bring value-added services to their clients. Our Staff of CPAs and industry professionals – all experts in the field of R&D tax credit incentives - will assist your clients in identifying, maximizing, and documenting the expenses and activities that qualify. R&D tax credit incentives can both significantly reduce your client’s current year tax burden, as well as generate a substantial increase in cash flow in the form of refunds from previous tax years. In some cases, the credits can function as grants and be paid even in the absence of tax liability. Although we work with large and publicly-traded companies, many of our clients have sales as small as $5m - $50m, and our clients in that modest revenue range have enjoyed the benefit of R&D credits from $100,000 to over $1m.
As new IAPA commercial associate members, we look forward to helping IAPA members and their clients. Please don’t hesitate to call us if you have ANY questions or visit our website at taxpointadvisors.com for more information!
Jeffrey Feingold, Founder and Managing Partner
Tax Point Advisors
131 Summer Street, South Walpole, MA 02071
P: 1-800-260-4138 x1 / +1 508-641-3884 Direct
Tax Point Advisors - Maximize your credit...minimize your risk.
New Legislation Allows CPA’s to Offset AMT with General Business Credits:
Businesses under $50m will be able to use general business tax credits - including the R&D tax credit - to offset Alternative Minimum Tax in 2010.
President Obama’s signing of H.R. 5297 this week marks a significant modification in the law for both corporations and business owners with respect to their utilization of General Business Credits. Prior to this new law, the maximum amount of General Business Credits that a company or individual business owner could utilize in a given year could be no greater than the amount that their regular tax exceeded their AMT. Likewise, they could not utilize any General Business Credits if their AMT exceeded their regular tax. With H.R. 5297 in place, these limitations no longer exist. General Business Credits can be utilized up to the full amount of the corporation or individual’s tax liability. In addition, the new law allows for a carry-back of 2010 General Business Credits to any of the previous five years; whereas, the previous law only allowed for a carry-back of one year.
There are two very important points to keep in mind with this change, however. The first is that only General Business Credits resulting from activities in the current 2010 tax year can be utilized, so you can not use credits that have been carried forward from previous years. The second is that you can not offset AMT if you are carrying back credit from the 2010 tax year to one of the previous five years.
"This new bill is a significant benefit for many of our small to mid-sized clients across the country," noted Jeffrey Feingold, Managing Partner of Tax Point Adviors, a national tax consultancy which specializes in government-sponsored credits and incentives. "Previously," Feingold added, "many of our clients who qualify for R&D credits were unable to utilize the credits due AMT. This bill will begin to address that problem for the first time. Still, Congress should go one step further and allow the credit to offset AMT for prior years as well as for 2010."