Myths That Keep Small Businesses from Claiming the R&D Tax Credit
Don’t dismiss the possibility of tax credits without doing the proper research beforehand. There is a lot of word of mouth myths that fly about regarding taxes and what you can and cannot claim, especially in the corporate world. Of course, consulting a certified CPA is always the way to go, but before you do this, we can provide you with some of the most common myths that keep small businesses from claiming the R&D tax credit.
We’re not a high-tech outfit, we don’t qualify.
Not true. How tech savvy your business may or may not be has nothing to do with your eligibility for the R&D tax credit. If you are developing new products or processes, at any level – even if you are perfecting an existing product – you may qualify. From streamlining your manufacturing to developing new implements to make your products – all of these things could qualify – regardless of whether you are high-tech or the definition of low-tech.
We’re too small of a business.
No you are not. Chances are, if you have an R&D department, or staff who are dedicated to researching ways to improve your business and products, you have enough employees to qualify for this credit. Size is one of the biggest reasons business don’t apply for this credit and they could be missing out on thousands of dollars.
We’ve tried to qualify in the past and didn’t meet the criteria.
Has your business changed? Grown? Dedicated more resources to R&D? Even if it has done none of these things, rules and regulations change constantly – especially in the world of business taxes. Why not look again?
It’s my accountant’s job to figure this stuff out – if they aren’t claiming it, it’s because we don’t qualify.
This isn’t always true. The R&D tax credit requires a lot of work and paperwork to substantiate, and unless you are providing the right documentation to your accountants they may be assuming, like you, that you don’t qualify. Oftentimes, only specialized accountants will be able to determine if you should be claiming this or not, and a lot of it has to do with how well they know your business. Talk to your accountant about it.
It’s too much work. Why bother.
Although it may seem like a lot of work to gather everything you need to substantiate a claim for this tax credit, it is well-worth the effort. You could be missing out on tens of thousands of dollars in tax credits. Picture what that could do for your business’s bottom line, and then decide of it’s worth the time and effort.
At Texas R&D Tax Solutions, we pride ourselves in knowledge of tax laws and our accounting expertise. Although you may think you need a specialist to figure out the R&D tax credit, you’ll find that with us you get accountants and specialists, all under one roof at our offices in Houston, Dallas and Austin, TX. If you need expert advice and expert assistance to apply for your R&D tax credit, rely on us, we’re here to help!