tax credits for businesses: 4 ways to maximize your benefit


Approximately 9.1 percent of your R&D costs might be eligible for a tax credit. Are you maximizing these tax credits for businesses? Here are four ways to reap the benefits:

1. Salaries

The salaries for employees working on R&D could count toward the credit. This includes payments to contractors based in the U.S.

2. Supplies and Equipment

The cost of your supplies and equipment could also lead to a tax credit. What counts is quite broad. For example, companies may receive a credit for payments made to cloud service providers.

3. Payroll Tax Credit

Small businesses get an extra bonus. If your annual gross receipts are below $5 million, you can claim up to $250,000 a year against payroll taxes. You can get an R&D credit even if you don't owe income taxes.

4. Carry Forward and Back

What if you can't use your entire R&D tax credit? Thankfully, you can carry back your credit three years against taxes you've already paid, and carry it forward 20 years for future taxes. If you can't claim these tax credits for businesses now, you'll use them one day.

If you have any questions, you should contact a CPA or certified tax professional before filing your tax returns to ensure you are following all applicable tax laws.