Tax Advisors & Funding Specialists

In today’s fast-paced business world, companies focus on generating profit and often overlook opportunities to reduce charges. At Bonham & Brook, we are here to help. Our team of tax advisers, technical experts, and lawyers can save you time and energy by identifying the tax credits your company may be eligible for.

R&D Tax Credit Explained

Businesses of all sizes can benefit from R&D Tax Credits, making it crucial for companies to have a clear understanding of the credit to maximize their potential for growth and gain a competitive advantage in their industry.

What is the R&D tax credit?

Are you investing in developing new, improved, or technologically advanced products or processes? Then you may be eligible for an R&D tax credit. Introduced as part of the tax code in 1981, the R&D tax credit rewards US companies that invest in research and development activities by offsetting their income tax liabilities over a three-year period.

Who can benefit from the R&D tax credit?

Don't think you qualify? It may surprise you that according to IRS guidelines, R&D doesn't necessarily mean white lab coats and test tubes. Put simply, a project qualifies as R&D when it aims to develop a new, improved, or technologically advanced product or process. In addition, activities revolving around the improvement of existing products or processes in terms of quality, reliability, performance, and functionality are also eligible for R&D tax relief.

How do you benefit from the credit?

Depending on the corporation’s type, the credit can either flow through the entity level to offset the corporation’s income tax liabilities or flow directly through to shareholders’ personal returns to offset income tax liabilities related to the business income flowing through from the company.

The Good News is...

If you don’t use the credit immediately or completely, the credit can be carried back one year or carried forward for up to 20 years to offset future liabilities. Plus, the R&D tax credit is retroactive, which means you may be able to claim R&D credits for three prior years, depending on when your tax return was filed. Curious to know more about it? Give us a call, and let’s discuss it in more detail!

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From other businesses to our own, growth is at the heart of everything we do.

Our team consists of financial professionals and technical experts in a variety of industries ranging from construction to Health care and pharmaceuticals. We have capitalized substantial expertise in R&D tax relief, hence we are confident in everything we do.

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