Source: Business News Dailey | Re-Post QBScott 2/26/2019 –
Growing a business eventually requires developing new products, technologies, systems and sometimes even industries. This growth is vital not only to the success of your individual company but also to the success of the overall economy, which needs innovation to continue growing.
However, innovation requires expensive research and development. In many cases, attempts at innovation fail, with no return on investment, or require multiple stages of development before becoming profitable. These costs can discourage businesses from investing in research and development. This is especially true for small businesses, which do not have the resources and cash flow that large corporations do.
That’s where the R&D tax credit can help your small business.
The Research and Experimentation Tax Credit is often known as the R&D tax credit.
It benefits businesses by helping them keep more of their profits while also improving their products and technology.
R&D tax credits allow qualified businesses to deduct the cost of qualified research and innovation from their taxable income.
Qualified research must be technological, involve uncertainty and experimentation, and create new products, processes or software.
Qualified research does not have to be successful.
Data analysis allows businesses in a variety of industries to claim the R&D tax credit.
Small businesses can use the R&D credit to offset the FICA portion of payroll taxes.
Author: Scott Meister, CPA
I help small businesses, accountants, bookkeepers, office managers, and business owners with their accounting needs. I’ve used QuickBooks since 2002 and train folks on how to use it efficiently. I create high-quality video training tutorials for QuickBooks and post them on QBScott.com.
Certifications include: Certified Public Accountant (CPA) | Certified Bookkeeper (CB) | Advanced Certified ProAdvisor for QuickBooks Desktop | Advanced Certified ProAdvisor for QuickBooks Online | Certified ProAdvisor for QuickBooks Enterprise | Certified ProAdvisor for QuickBooks Point Of Sale