If you are a small business owner, you should take advantage of the R&D tax incentive open to you. Many small business owners mistakenly assume that they are not eligible for this tax benefit because they do not have a large laboratory filled with research personnel doing R&D. But even if you outsource your product testing or employ engineers to do your technical work, you may qualify for this tax credit.
Generally, if your business is in industries like biotechnology, software development, technology services, software-based services etc, you should qualify for the R&D tax credit. Doing any form of research and developing a product you intend to patent would generally qualify you also.
Here’s the good news – the rules have recently been simplified. In fact, if you acquire a small business, the tax credits can be transferable and be applied retroactively. This is good news especially to new businesses because it means the credit incurred for R&D expenses in the initial years when there is little or no income can be carried forward to offset taxes on future profits. Here’s the kicker – the time you have to carry forward your R&D tax credit is a whopping 20 years!
Please see full article below for more information.
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