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Starting in tax year 2022, R&D expenses must be amortized over a period of five years instead of deducting the expenses in the year incurred. Any foreign R&D expenses must be amortized over a period of 15 years. The requirement to amortize expenses is independent of the ability to claim the R&D tax credit. You

New businesses and startups have the opportunity to utilize the R&D tax credit to reduce their payroll taxes for a period of up to five years. This tax credit was made permanent through the PATH Act of 2015. This act introduced several improvements, including provisions allowing eligible businesses to offset their alternative minimum and payroll

Research and Development (R&D) tax credits can be claimed for specific types of expenses incurred during your financial year. The government provides these incentives to support innovative businesses that take risks in their pursuit of new ideas. If your company is new to these incentives, you may have missed out on claiming credits for past

Taxes and the laws governing them are constantly changing, as made evident in the recent changes to how companies have to handle their R&D costs. Previously, businesses could write off those costs immediately; however, they now must capitalize their R&D costs and view them as assets instead of expenses. Due to these changes, it’s more

In the ever-complex realm of financial management, the right tools can spell the difference between seamless efficiency and potential pitfalls. Research and Development (R&D) tax credits remain a pivotal incentive for businesses to innovate and push boundaries. However, with intricate regulations and ever-evolving guidelines, leveraging these credits can be a daunting task without the aid

Understanding and efficiently using R&D tax credits can greatly benefit your business, and the Alternative Simplified Credit (ASC) is one such method that can make this possible. This article delves into the intricacies of ASC.  This method allows a broader range of companies to participate due to its less stringent requirements compared to traditional methods

It is important to have an understanding of the complexities surrounding Research and Development (R&D) expenses and their amortization in the evolving business tax environment we have today. Beginning in 2022, new regulations stipulate that these expenses need to be accounted for as assets and spread out over a period of five years. This change

Taxpayers face significant changes in the treatment of research or experimental (R&E) expenditures under Section 174 due to the Tax Cuts and Jobs Act (TCJA). This article explores the implications of the new capitalization rules and provides guidance on documenting R&E expenses accurately for tax purposes. Understanding the Changes The TCJA introduced changes that require

Businesses have the opportunity to reduce their tax liabilities by determining their qualified research expenses (QREs) and claiming them as a deduction through the federal research and development (R&D) tax credit program. Companies that want to take advantage of this dollar-for-dollar reduction absolutely need to have a solid understanding of what kinds of expenses count

Claiming the R&D tax credit can be an effective way to reduce your federal tax liability if your business engages in research and development. But in order to do this, you need to support the expenses you are claiming properly. Doing so is critical and mandatory to avoid an issue later on.  But what kind

Should you be paying quarterly taxes? If you have a business, whether you do freelance work, are a sole proprietor, or own a corporation, the answer is likely yes. When you run a business, taxes can get tricky quickly — there’s no one paying taxes for you per a W4 form. It’s up to you

A balance sheet shows your business’s equity at any given time, showing your company’s worth considering its debts and liabilities — essential information for everyone to have on hand. We’ll discuss how a balance sheet works and what type of items your business needs to list and leave you with some links to our team’s

When we mention the R&D tax credit, you might think of the federal program that incentivizes US businesses to improve or develop new products and processes. However, many states also offer this incentive — and Texas approaches it a little differently than others. Texas offers R&D incentives in two different ways: Franchise tax credits and

Has your accounting firm gone paperless? If so, you’re not alone — businesses worldwide are moving their data into customer relationship management (CRM) platforms to better manage their information and streamline their accounting processes. However, if you’re still relying on paper forms and old-fashioned methods, scaling your accounting business is almost impossible. Accounting CRMs offer

Software development is an innovative field; devs transform business operations and create products driving productivity and efficiency across industries. Many don’t know that most software development companies can qualify for the federal R&D tax credit, providing significant saving opportunities for a range of businesses. Most expenses that your software development company incurs during research and

The R&D credit helps businesses reduce their tax liability based on their qualified research expenses (QREs), but determining which expenses qualify can be confusing. Keep reading to see if your research expenses qualify for the R&D tax credit. What Is the R&D Credit?  The federal R&D tax credit is a way that the government incentivizes

As a small business owner, tax season is never fun. But with better tax planning, you can take advantage of deductions and credits that can help reduce your business’s tax burden. These seven strategies discuss the do’s and don’ts of small business tax planning, so you can keep more of your profit in your pocket!

When looking at the tax code, instructions, and other forms, you’ll come across a number of different terms, some of which are easy to understand and some which aren’t. The IRS even knows this as they make an effort to include glossaries and definitions with some of their publications.  Unfortunately, not everything is clearly defined.

Did you know that the total global debt of non-financial corporations has reached a staggering $87 trillion? However, debt (and any other company’s financial obligations) are okay. The reality is that these liabilities are an essential part of running a business.  But precisely what are liabilities in accounting? Understanding this question is integral to keeping

If you’re like most people, the only context you hear debit or credit applied to is at a cash register or bank account. But the reality is that debits and credits are vital to business transactions and the accounting that tracks these transactions.  That’s why they’re both crucial to understanding. So what’s the difference between

Did you know the global AI market is worth an estimated $327 billion? Many people think that AI is only confined to IT applications. But the reality is that the artificial intelligence behemoth has its tentacles in nearly every industry, including accounting.  And the good news is that’s not a bad thing. In this article,

Gone are the days when bookkeeping was confined to actual books. These days, like most industries, accounting has turned to technology to streamline efficiency and save costs.  However, the use of accounting technology is constantly changing as new interfaces and advancements are being applied each year. So how is accounting technology changing? And how can

As an accountant, you know that change is inevitable in your industry. Whether it’s updating tax codes or new disruptive technology, it’s vital to stay on top of the trends in your industry. If you want an learn about the accounting trends in the coming year, you’re in the right place.  In this guide, we’ll

Many people think that they’re immune to IRS notices. After all, doesn’t the IRS usually target wealthy individuals and businesses? Sadly, that’s not the case.  Since these targets require investigation and litigation, the IRS focuses on low-income wage earners and small businesses five times more than other parties. If you receive IRS letters, it’s essential

If you’re like most home and business owners, you likely don’t concern yourself with the intricacies of tax codes. However, that might be a mistake. Certain tax codes, like the Augusta Rule, can provide exemptions on taxable rental income.  But exactly what is the Augusta Rule for taxes? And how do you take advantage of

When it comes to your taxes, your AGI is arguably more important than your gross income. After all, your tax burden is not calculated based on your gross income. Instead, the IRS subtracts some adjustments from your gross income to arrive at your adjusted gross income. This is what is used to calculate your tax

In 2019, there were 27.8 million non-farm sole proprietorships. If you are one of these, you are probably constantly on the lookout for ways to run your business more efficiently.  That is why tax credits and deductions are so great. They allow your business to save money without fundamentally changing how you do business. In

Everyone needs goals. Setting goals can improve your productivity at work and generally has a positive impact on mental health.  If you are an accountant looking for good goals to set, we’ve got you covered. We created a list of ten example goals that any accountant can use. Read on to explore them all! Related:

You’ve completed all the steps needed to secure your next accounting client. But once you do this, you need to make sure you complete a few more steps to get them ready. The onboarding stage for accounting clients can be more overwhelming than in other industries.  After all, you need to gather documents, ask for

Handling your taxes is difficult and can lead to errors if you are not careful. That is why around 46% of Americans use tax software to file their taxes for them. The convenience, accuracy, and professional help provided by services like these are essential to many.  However, not all tax preparation services are built the

It takes a lot to achieve success in accounting. This is why many accounting firms and startups seek something to provide an edge over their competitors. One of these is entering a niche.  Entering an accounting niche provides a range of unique benefits. However, it can be tough to determine which niches are worthwhile.  Let’s

Making your mark in accounting can be incredibly rewarding but is difficult, especially when just starting. The industry has become more competitive; thus, many struggle to find their way and achieve success. However, if you go into the business with a good plan, you can not only survive, you can thrive.  Here, you’ll find a

Profit and loss are one of the most basic business concepts. But when tax time comes, these simple concepts can get much more complicated. This happens because the amount of profit or loss you have from the sale of an asset directly affects your tax bill. But by how and by how much? To figure

Since 1954 business owners have had the option to deduct certain expenses in the year that they incurred them. This was a critical way many offset the costs of researching and developing new products; it drove innovation in many industries.  But, as of now, the rules have changed. Effective January 1, 2022, IRC Section 174

There are two vital parts to a successful month-end close (especially for startups and SaaS companies): Revenue recognition and revenue reconciliation. Many startups make the mistake of focusing on recognizing and recording transactions, skipping the reconciliation process — a crucial accounting step. We’ll discuss the basics of revenue recognition and reconciliation, what they are, why

More new businesses were launched in 2021 and 2022 than ever before. Owning a small business lets you go after what matters most to you in a meaningful and impactful way, but it’s also a scary venture for new entrepreneurs. Beginning the process with an idea of the common pitfalls to avoid is crucial to

Funding options for your business can seem endless, whether you need short- or long-term financing or if your business is in the startup stage or already established in its industry. That’s why we’ve organized this list of the ten best business funding sources going into 2023 — keep reading to discover the best funding options

The R&D tax credit is vital to keeping companies at the forefront of innovation by rewarding companies that develop new processes and products. In 2020, California suspended its R&D tax incentives due to the economic shock following the pandemic. However, the state recently had a budget surplus, and in February 2022, Governor Newsom signed into