Get insights into how to save on taxes. Talk To Our Experts
THE APRIL 18TH TAX DEADLINE IS APPROACHING FAST
DON'T FORGET TO CLAIM YOUR R&D TAX CREDIT! BOOK A CALL TODAY
TAX DEADLINE
00
Days
00
hours
00
min
00
sec
THE APRIL 18TH TAX DEADLINE IS APPROACHING FAST
DON'T FORGET TO CLAIM YOUR R&D TAX CREDIT! BOOK A CALL TODAY
00
Days
00
hours
00
min
00
sec
April 13, 2023
1 min read
How much is the R&D tax credit worth?
Tax Day 2023 is arriving at a precarious moment for innovative American companies. The last year has seen a wave of layoffs and a loss of value for many companies in industries like tech, manufacturing, and many other sectors. On top of that, changes to tax law with regard to R&D Capitalization have massively changed what companies will owe the IRS in April or October. That’s why it’s never been more beneficial for innovative companies to claim the R&D Tax Credit.
The federal R&D tax credit is a 10% cash-back credit for product development expenses. Startups with <$5M revenue and <5 years of revenue can apply up to $250k against payroll taxes. All companies can apply it against income taxes or carryforward. Neo.Tax has built a software solution that maximizes your credit and prepares your filing in <30 minutes.
.png)
Here are four examples based on real companies to give you a better sense of the massive value of filing for the credit with Neo.Tax.
Based on new guidance from the IRS, it seems likely there will be a more stringent view of amended returns — the burden of proof is on the company and will need to be even more detailed — which means waiting to amend the returns may become more expensive and cumbersome going forward.
So, make sure to file your credit with your taxes (or to file an extension so you can get your R&D credit for this year). Book a call and we can walk you through all the ways to make R&D spend valuable for your innovative company!
.png)
.svg)
0
0
Receive weekly updates on new posts and features
At Neo.Tax, we talk to scores of controllers and Heads of Tax every month. One thing is clear: the old way of filing for R&D Tax Credits has become a burdensome pain. You’d think that so many businesses moving their project management and payroll online, via software like Jira, Rippling, and Workday would simplify the filing process. But, in some ways, it’s made it harder.
The payroll and project management output is a rich dataset, but it’s also, well, voluminous. If that data is not inputted perfectly—and let’s be honest, it never is—that means it’s up to a controller or Head of Tax to sift through the mess to create the filing. Engineers need to be trained (and retrained) on the correct project tagging process, and then cajoled to sort out any inputting errors. It’s a waste of time for your filer and your engineering teams.
Which is why Neo.Tax created our AI system.
No one starts a company because they’re excited about accounting and taxes. Well, no one except the Neo.Tax founders :)
But for those other 99% of founders, here’s a cheat sheet and guide to ASC 350-40, an accounting guideline that pertains to Internal-Use Software Development Costs. Maybe you’ve never heard of ASC 350-40, but you should get to know the rule if you ever plan to go public.
