Archive for April 5, 2024

What Is The Benefit Of The R&D Tax Credit?

What Is The Benefit Of The R&D Tax Credit?
What is the Research And Development Tax Credit?

The R&D tax credit, also known as the Research and Development tax credit, was created as a way to incentivize U.S. based research and development activity. The Protecting Americans from Tax Hikes (PATH) Act in 2015 made this a permanent tax credit and extended the benefits to startup companies. The credit enables businesses of all sizes to reduce their federal income tax for qualified research expenses. These expenses must be for qualified research activities.

What Is The Benefit Of R&D Tax Credit?

Claiming the R&D tax credit can potentially result in significant cost savings. The benefits include:

  • Increasing Cash Flow
  • Federal and State Dollar-for-Dollar Income Tax Reduction
  • Claim Credits for Open Tax Years Going Back 3-4 Years
  • Reducing Your Tax Rate

    How To Claim The R&D Tax Credit

    A taxpayer can claim an R&D tax credit, on their timely filed tax return including extensions for a given year and a taxpayer can amend prior returns to claim the credit. For amended tax returns, this can typically be claimed for the previous 3 years.

    The credit is claimed by filing IRS Form 6765, Credit for Increasing Research Activities (for the year in which the qualified expenses were paid or incurred).
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Indiana Economic Nexus Threshold Amended

Indiana Economic Nexus Threshold Amended

On March 13, 2024, Indiana Governor, Eric Holcomb, signed an emergency law amending Sales and Use Tax provisions in the state. The most notable of these provisions was to amend the economic threshold for sales tax nexus by removing the number of annual sales transactions in the state as one of the two triggers that require retail merchants to collect and remit state sales tax.

Background Of Economic Nexus

In a past blog, we discuss the origins of economic nexus and where we were in 2023 – 5 years after the Wayfair case was decided:

https://milesconsultinggroup.com/blog/2023/06/13/on-the-5th-anniversary-of-the-wayfair-decision-the-impact-of-economic-nexus-on-small-and-mid-sized-businesses/

Have questions about economic nexus in Indiana or another state? Click here to schedule a free consultation:

In most states, the threshold began as either a sales limit or a transaction limit. For example, when South Dakota’s economic nexus law was enacted, it established a threshold of 200 transactions or $100,000, which many states later modeled  as they passed their own economic nexus legislations.

Indiana’s original economic nexus law came into effect on October 1, 2018, and before this law change, the threshold was the lesser of $100K of sales OR 200 transactions.

Transaction Threshold Often An Unnecessary Burden

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Written by | Posted in Economic Nexus • Indiana • Sales And Use Taxes

Avoiding Costly Mistakes: Four Essential Tax Concepts For The Non-Tax Business Attorney Or CPA (Webinar May 16th 2024)

Avoiding Costly Mistakes: Four Essential Tax Concepts For The Non-Tax Business Attorney Or CPA
Even smaller transactions might have big traps and significant tax implications – leading to unexpected tax liabilities for your clients and potential malpractice claims for you.
This webinar covers four essential flow-through tax concepts you need to know to avoid common ‘foot-faults’ or worse and to continue to be the “go to person” for your clients.During this one-hour webinar, the Tax Forum team of Chuck Levun, Michael Cohen and Scott Miller will provide a top-level look at …

  • Converting an existing S corporation to an LLC on a tax-free basis to obtain “charging order” protection
  • Simple business structuring to circumvent the $10k deduction limitation for the portion of state and local income taxes attributable to business income
  • How not to cause your client to be one of the estimated 500k+ LLCs that incorrectly thought it was going to be taxed as an S corporation but, because of certain language contained in its operating agreement, is not an S corporation
  • Personal goodwill and the C corporation business sale – identifying situations in which double tax can be avoided

Any one of these could make the difference between you being a hero or creating a significant problem for your clients.

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Written by | Posted in Tax Forum