951 Reserve Drive Suite 100
Roseville, CA 95678
Research and Experimentation Tax Credits (R&D)
- Designed to help with the cost of uncertain research
- Is available to many industries and is much more broad than many think
- Can offset up to 20% of research costs - including wages, supplies, equipment and contract employment
- Is offered through the IRS and most States
- Highest dollar amount tax credit used in the US
Why a CPA should offer this service to their clients
- Maintain an offering of services that only the largest of firms can typically afford
- Benefit your clients tremendously by offering a dollar for dollar tax credit that can significantly improve their bottom line
- Work with a professional firm (me) with a proven track record
- Ensure that your clients will not leave to go to a large firm that may provide accounting, and tax credit analysis
- Increase your firm revenue by adding additional forms and filings to your clients billing
The R&D credit is an instant spring of cash, it is also a major reduction to federal and state tax liability for current and future years.
Business owners in nearly every industry are unaware that federal and state research and experimentation (R&D) tax credit programs exist that may reward their day-to-day efforts aimed at producing an improved product. The Research and Development Tax Credit is a government-sponsored benefit that provides cash incentives for companies conducting research and developing products and services in the U.S. These monetary incentives were implemented to stimulate research, development and product experimentation in industries of all sizes, to encourage companies to work together, and to transform the economic landscape.
This credit is not simply for large corporations, companies with zero employees can also take advantage of this tremendous credit. "Any company that designs, develops, or improves products, processes, techniques, formulas, inventions, or software may be eligible. In fact, if a company has simply invested time, money, and resources toward the advancement and improvement of its products and processes" may qualify.
Research credits were first introduced back in the 1980s and were created to create a better financial environment for manufacturing companies in the US to compete with Japanese manufacturing companies, whom at the time were booming. Because of the large growth of technology, the credit has been revised multiple times in order to accommodate new tech companies that do a lot of in house research and development. The credit is meant to lower the cost of research in order to encourage more of it. So far the credit has been seen as a contributing factor in the huge growth of technology in the US. Since the 80s many states have followed suite and now offer these credits as well.
Now, more than $5 billion in federal R&D tax credit benefits are given out annually.
What I can Offer Your Company or Client
Your Company (or client) pays nothing until you actually get the credit from the taxing authority. Unlike most companies that supply the research credit services, this is something our firm takes pride in offering.
Allow us to do the complex calculations involved, and help classify what qualifies and what doesn't. We will then audit-proof your credit by meeting all the requirements that the Federal and State agencies place.
Our company will not only represent you in the event of an audit on your R&D credit computations for free, but we guarantee our work, and will refund our fees if anything is ever overturned.
CA Enterprise Zone Tax Credits
- California Specific Tax Credit
- Is available to companies located in specific enterprise zones throughout the state (some listed below)
- Can offset state tax including wages, and equipment
- This complex tax credit requires heavy analysis, so most small businesses cannot do it on their own
- Highest dollar amount tax credit used in California
If you are located within a California Enterprise Zone, you can potentially offset your California State tax liability. We can help you determine whether or not you are in an enterprise zone.
Some areas that are potentially in the zone: Florin Perkins area of Sacramento, West Sacramento, Northgate area of Sacramento, Yuba City, Modesto, Visalia, San Jose, San Francisco City, Oroville, and many more!
Our firm maximizes your credit by not only analyzing your employees addresses upon hire*, but we also qualify them under SEVEN more categories, that is seven more categories than most other firms.
We work closely with you and your accountant (if you use another accountant) in order to make sure that everything will be air tight in the event of an audit, and your business earns the most possible from the tax credit
Description of the Enterprise Zones
The State of California has designated 42 Enterprise Zones throughout California to encourage business growth and job creation in those areas. Businesses that are located in an Enterprise Zone and hire qualifying employees can earn more than $36, 000 in tax credits per qualified employee over a five-year period. It is not unusual for 20 to 40 percent of a companys current employees to qualify for the credit. Since the amount of credit per qualified employee is so considerable, even a few qualified employees can generate a significant refund of YOUR tax dollars. There are also significant tax credits for purchases made by your business of qualified equipment including manufacturing equipment, computers, etc.
Possible scenario for the tax credit - What you could get
Assume your business has 25 employees working in the Enterprise Zone
You have a 20% qualification rate (note: normally 30-40%) and 5 employees qualify, and
If employees make approximately $12.00/hr (1.5x current minimum wage), working full time (i.e. approximately 2000 hrs/yr),
The following credits would be available:
- Year 1 credit:       $ 62,400
- Year 2 credit:       $ 49,920
- Year 3 credit:       $ 37,440
- Year 4 credit:       $ 24,960
- Year 5 credit:       $ 12,480
Total credit (5 years):       $187,200