What is the R&D tax credit?
The R&D tax credit is a federal business credit designed to incentivize companies to develop or improve products, processes, techniques, formulas, inventions, or software. It is broader than many business owners realize and may apply to industrial, manufacturing, fabrication, engineering, and technical businesses.
Do we need a laboratory to qualify?
No. Many qualifying activities occur in manufacturing facilities, fabrication shops, machine shops, field operations, engineering departments, and production environments.
Does the work have to be new to the world?
No. The work generally does not have to be new to the world. Activities may be worth reviewing if they involve products, processes, or methods that are new or improved for your business.
What industries commonly qualify?
Common qualifying industries include manufacturing, fabrication, machining, industrial automation, software, engineering, architecture, construction, agribusiness, chemicals, plastics, aerospace, defense, energy services, and technical professional services.
What activities commonly qualify?
Potential qualifying activities include product development, process improvement, prototype work, testing, design iterations, equipment modifications, tooling development, automation integration, software development, and technical problem solving.
What records are needed?
Useful records may include payroll records, project lists, job records, invoices, drawings, CAD files, engineering notes, test results, production reports, technical emails, employee interviews, and accounting records.
Can you work with our existing CPA?
Yes. Mixon Tax Consulting, LLC can coordinate with your existing CPA or tax preparer regarding credit implementation and reporting.
What happens if the IRS challenges the credit?
Mixon Tax Consulting, LLC partners with Mixon Tax Law, PLLC. If an R&D credit is challenged by the IRS, Mixon Tax Law, PLLC may provide audit defense or tax controversy representation through a separate legal engagement.
Is Mixon Tax Consulting, LLC a law firm?
No. Mixon Tax Consulting, LLC is not a law firm and does not provide legal representation or legal opinions. Legal services, if needed, are provided only through a separate written engagement with Mixon Tax Law, PLLC.
