5 most overlooked expenses in R&D credits
When it comes to research and development tax credits, certain costs related to wages, supplies and contract research are eligible. Often, though, taxpayers — and more specifically, the engineers doing the work — overlook various processes and routine work that can be tapped for extra tax savings.
R&D credits aren’t limited to what’s never been done before, such groundbreaking inventions as the lightbulb and the first cell phone. There is no IRS requirement that technology be revolutionary or meet a first-to-market threshold of innovation to be eligible for credit, only that products and processes be improved.
Yet, each year, corporations and pass-throughs across industries fail to claim R&D tax credits because they aren’t aware that many day-to-day activities qualify for this dollar-for-dollar reduction in income tax liability. Here are some of the most overlooked qualifiers we’ve seen in recent years.