This blog post is going to be short and sweet.
If you make something, design new technologies, research new opportunities, or live or work in an urban redevelopment zone, you are probably overpaying your taxes.
There are tax credits for each of these activities, and most business owners are missing the opportunities. There are 5 common reasons why most business owners are not taking advantage of these tax credits:
- They don’t know about them – Ask your CPA. If he or she does not know about them, find someone who does.
- Their accounting is incorrect – Without a proper reconciliation of your fixed assets, inventory, and research and development allocations, you may be missing out on hundreds of thousands of dollars in tax credits. Last month, Andrew Ruff, a TGG CFO saved his client over $150,000 in research and development tax credits by categorizing the business expenses properly. Without the proper categorization, it was impossible for the CPA to see the tax credit opportunity.
- They don’t ask every year – Tax credit laws change almost as often as the Kardashian family changes boyfriends and girlfriends. Without diligence, laws can change, and opportunities can arise and vanish without notice.
- They believe they don’t apply – These tax credits are much broader than most people (including CPAs) believe. Finding a CPA with extensive knowledge in the tax credit arena is invaluable.
- They are too busy with other things – Too often, as an entrepreneur, I am focused on growing the business and improving the quality of the services we deliver. The last thing I think about is tax credits and compliance related activities. However, with hundreds of thousands of dollars on the line, I can probably make more money with a little effort than I can with a lot of effort on new sales.
The Bottom Line: Tax credits are out there for the taking. Go get them!