Companies Can Realize Thousands Of Dollars In Research Tax Credit
As the taxation calculations pile up, companies keep looking for ways to acquire tax credit. Two such great tax assistance tools are the research tax credit and the 179D tax deduction for energy efficiency. The first aspect applies to tax benefits to encourage companies to invest in business research and development on US soil. The 179D tax deductions, however, help companies see the profit in lowering energy consumption. In reality, companies, except the big ones seldom look into these aspects of tax benefits.
- motive to research
The concept of tax credit based on investments in research and development initiated in the early 1980s, and since then the credit has been by fourteen extensions, with the present system expiring in December 2013. The last extension of the credit system was by the passing of the American Taxpayer Relief Act (ATRA) of 2012. Since this is a largely unknown tax credit, many businesses, big or small, fail to take its advantage.
- Anyone can apply
Many businesses are of the view that they can apply for the research tax credit only when they are investing in research to develop something new by a recognized research setup. Although this fact is mostly true, however it is not an absolute fact. Businesses who can show proven proof of investing in research to enhance existing products and not always by a laboratory setup can successfully apply for this credit. already small businesses can also apply when they can show evidence of collecting customer interaction data and investing in the examination of this data.
From manual ‘fill the form’ research to online business research using various CRM systems analytics, all are eligible for this tax assistance. It also applies to state laws, as, as of now, 38 states include a tax credit on research and many more states are considering implementing this policy to encourage businesses to perform with greater scientific accuracy. Companies applying their research results by intelligent branding and Neuro marketing should also consult with tax experts to estimate their eligibilities.
- Tax benefits of adopting energy efficiency
Similarly, the 179D tax deduction on energy efficiency can also be a possible source of harvesting tax benefits. These deductions work in accordance with the legal stipulations of the Emergency Economic Stabilization Act of 2008. To be eligible for this, companies need to make meaningful reductions (50%) in the energy expenditure for HVAC, building envelope, and interior lighting, starting from January 2006. The present rate of deductions is at $1.8 per square foot for the eligible.