An innumerable number of companies all over the country are losing out on a significant amount of money and time on R&D tax credits, either because they think they are too small to claim it, because of lack of adequate documentation, and in other cases, because of the belief that research has to be done by specific parties on the C-level suite. And as a result of these and many other myths, most of these companies end up missing out on as much as $250,000 each year; this is money that could be pumped into your business to accelerate growth. Well, this doesn’t have to be the case anymore thanks to the R&D tax credit software, which helps you have the right documentation, make the right claim, and even have a better understanding of the expenses and the businesses that qualify for R&D tax credits.
At the end of the day, it’s important to understand that a R&D tax credit is not applicable only to the tech startups, and businesses in different categories/ industries could qualify for this tax credit – we are talking about businesses in the life sciences, hardware, ecommerce, financial services, agriculture, etc. Since the establishment of this tax credit back in 2016, as a means to more designated-research innovation, as well as development activities. This tax credit also applies to the pre-revenue activities or companies where credit is applied as a means to offset payroll liabilities; and income tax liabilities for the business that earn revenue immediately. Trying to understand how your company can use the R&D tax credit can be a little complicated, but fortunately there are lots of companies such as clarusrd.com that can help you figure out how you can take advantage.
The best bit is that you could easily determine whether you qualify for this tax credit or not using the best of tax credit software.
That said, here are some of the ways in which the best tax credit software would save you time.
- Expenses categorization
Using the software, it becomes easier for you to specify the categories of expenses that qualify for the tax credit. If you are trying to figure out everything about the qualifying expenses for the R&D tax credits, here are some of the expense categories that you need to consider – W-2 wages (taxable), the supplies used during research plus the extraordinary utilities, contract research, as well as the lease and rental costs for computers and server space, etc.
- Meticulous Documentation
One of the primary advantages of using an R&D tax credits software is that the software systems are designed to ensure the recording of proper records, an important function that ensures significant time savings during audits, as well as the determination of the qualifying costs and expenses and the substantiating of claims. The software solutions for R&D tax credits also ensure the right preparation and filing of the R&D tax forms, time-tracking of employees, preparation of the payroll offset forms and quarterly tracking of the same, and finally, it allows for easy defending od the credit in case of audits.
- End-to-end Services
With a software specific to R&D tax credits, you won’t have as much time to go through all your books or to coordinate with the payroll providers, but the software ensures that everything is done right.
These are just some of the ways in which the R&D tax credit software would help businesses.