Maximize Your Savings with
Our R&D Tax Credit Expertise
Our tax experts specialize in R&D tax credit claim processes, ensuring every qualifying activity is accounted for and managed with precision.We offer a streamlined claim process, minimizing paperwork and maximizing efficiency, allowing you to focus on innovation, not bureaucracy.
Our tax experts specialize in R&D tax credit claim processes, ensuring every qualifying activity is accounted for and managed with precision.We offer a streamlined claim process, minimizing paperwork and maximizing efficiency, allowing you to focus on innovation, not bureaucracy.
What is the R&D Tax Credit?
The Research and Development (R&D) Tax Credit represents a substantial financial benefit for businesses engaging in the pursuit of innovation within the United States. If your company is investing in research and development, you may be eligible to claim a tax credit that can amount to as much as $500,000 or more. This incentive is not just a deduction; it’s a dollar-for dollar credit against taxes owed or paid. The R&D tax credit, approved by the IRS, benefits businesses of all sizes by reducing payroll tax liabilities, promoting R&D investment, and reducing cash flow.
The Research and Development (R&D) Tax Credit represents a substantial financial benefit for businesses engaging in the pursuit of innovation within the United States. If your company is investing in research and development, you may be eligible to claim a tax credit that can amount to as much as $500,000 or more. This incentive is not just a deduction; it’s a dollar-for dollar credit against taxes owed or paid. The R&D tax credit, approved by the IRS, benefits businesses of all sizes by reducing payroll tax liabilities, promoting R&D investment, and reducing cash flow.
Simplify Your R&D Tax Credit Claim
Effortless R&D Tax Credit Processing — Zero Stress, Maximum Benefit.
The R&D Tax Credit is a lucrative opportunity for businesses like yours to reduce tax liabilities and increase cash flow. However, navigating the complexities of tax law can be daunting. That’s where we come in. Our comprehensive service takes the hassle out of the R&D tax credit, so you can focus on what you do best — innovating.
Comprehensive
End-to-End Service
Comprehensive End-to-End Service
Our full-service solution handles every aspect of the R&D tax credit claim. We meticulously identify all eligible R&D expenses, ensure precise filing, and guarantee the credit is accurately applied to your payroll taxes. With us, you’re not just filing a claim; you’re optimizing your financial strategy.
Rigorous Documentation
Rigorous Documentation
Precision is key in claiming the R&D tax credit, and our approach is nothing less. Leveraging advanced software combined with our tax experts’ acumen, we ensure that every piece of paperwork is accurate and audit-proof. We coordinate with your payroll provider and accountants, maintaining a synchronized effort for a flawless claim process.
All-Encompassing Support
All-Encompassing Support
Choose our all-in-one support system for an integrated financial solution. Our knowledge of your business’s financials is comprehensive because we manage bookkeeping, tax preparation, and R&D credit claims. This synergy allows us to quickly identify qualifying expenses and enhance your savings with unmatched efficiency.
We’ve refined our approach to ensure your R&D tax credit claim is as straightforward and efficient as possible:
1
Comprehensive R&D Tax Study
We start by conducting a thorough R&D tax study to determine the total amount of qualifying R&D expenses that can be claimed on your federal tax return.
2
Tax Paperwork Preparation and Filing
If you choose to use Scout Fi, we will handle all the necessary tax paperwork for claiming the R&D credit. For those not using Scout Fi, we provide the essential documentation needed for your tax preparer.
3
Supporting Documentation
We compile all the required supporting documents which are crucial should the IRS audit your claim.
4
Payroll Collaboration
Our team works closely with your payroll provider to apply the R&D credit against your payroll taxes and verify its accuracy throughout the fiscal year.
R&D Tax Credits: A Clear and Simple Explanation
Your credit from the IRS can be up to 15% of your qualifying R&D expenses.
Frequently asked questions
Am I Eligible for R&D Tax Credits?
Businesses with an annual revenue below $5 million, operating for less than five years since the initial sale or invoice, may reduce their Social Security Payroll tax through the PATH Act’s R&D credit. If not applicable, you can still claim the regular R&D Credit towards your income tax.
What Constitutes a Qualifying R&D Activity?
- Facing Technical Uncertainty: The activity must address an uncertainty related to the development or improvement of a process or product.
- Engaging in a Process of Experimentation: This includes a process designed to resolve the technical uncertainty, which may involve modeling, simulations, or trial and error.
- Rooted in Technology: The experimentation should be grounded in the physical or biological sciences, engineering, or computer science.
- Aiming for a Qualified Purpose: The intent should be to develop a new or improved business component that increases its performance, quality, or reliability.
How Much Can I Expect in R&D Tax Credits?
The potential R&D tax credit is not capped and varies depending on the R&D costs incurred. These credits can range from 5% to 15% of qualified R&D expenses. By utilizing the PATH Act, companies can claim up to $500k* in credits against payroll taxes and carry forward any excess to offset future income taxes. For a typical startup with less than $5M in revenue and spending a substantial part of its budget on R&D activities, the tax credit might represent a significant percentage of their R&D expenditure. The precise amount can be easily calculated based on your R&D spending and our transparent service fee structure.
Can You Claim the R&D Credit for Previous Years?
Absolutely. We can guide you through filing an amended tax return to claim the R&D credit for the past three years. Do note, the PATH Act R&D credit is not available for amended returns.
What types of comprehensive R&D credit services are offered by Scout Fi?
Our full suite of services ensures a thorough approach to claiming your R&D tax credits:
Expense Identification: We pinpoint all qualifying R&D expenses.
IRS Form Preparation: Our team prepares and files Forms 6765, 8974, and 941 to secure IRS approval. If you’re with Scout Fi, we handle the entire filing on your behalf.
Detailed Documentation: We compile all necessary technical and financial documentation to substantiate your R&D activities, an essential step for audit
preparedness.
Collaborative Accuracy Checks: We work in tandem with your tax professionals, payroll providers, and accountants to ensure the accuracy of your claims.
Continuous Credit Monitoring: Our services include ongoing checks to ensure the R&D credit is consistently applied against your payroll liabilities.
Expert Support: You’ll have access to our R&D credit experts via email and phone for any queries or guidance needed.
Can Scout Fi provide support in the event of an IRS audit?
Why should a business conduct an R&D study?
Scout Fi advises all claimants of the R&D tax credit to conduct a thorough R&D study. This study is pivotal as it ascertains the precise R&D expenses eligible for the credit and compiles the necessary supporting documentation, bolstering your claim.
What happens if I'm audited by the IRS?
When claiming the R&D tax credit, the burden of proof lies with you. It’s essential to have all relevant tax forms and a solid foundation of both technical and financial justification for your claim. If audited without this, you may have to repay the credit with additional penalties. The IRS’s ability to scrutinize claims from up to 7 years ago underscores the need for meticulous record-keeping.
Do state-level companies offer their own R&D tax credits?
Yes, 33 states currently provide R&D tax credits, aligning generally with federal guidelines on qualified R&D expenditures, with some exceptions. Scout offers advisory services for state-level credits. For instance, the R&D credit in California is non-refundable, meaning it can’t offset payroll taxes. Additionally, to qualify, the R&D work must be conducted within California, and the credits can be carried forward until they are fully utilized.
Your all in one accounting partner
Your all in one accounting partner
Bookkeeping
Unlock financial clarity and confident decision-making with our meticulous bookkeeping services. Choose precision for success in every financial move.
Tax
Optimize your financial efficiency and embrace tax season with confidence. Our tailored tax solutions strategically position your business for success, ensuring compliance and a stress-free experience.
CFO
Elevate your business strategy with our dedicated CFO services. Beyond numbers, we provide strategic financial oversight, driving your venture towards sustained growth and success.
Unlock Financial Brilliance with ScoutFi
Dive into the latest financial insights, expert tips, and tailor-made strategies designed for your success.
