Many business owners would agree that navigating the tax waters are tricky, at best. The U.S. Treasury is offering help in this area, having just introduced new regulations that can potentially help qualifying small to medium-sized businesses. This regulation would allow innovative businesses to apply for research and development alternative simplified credit.
Rob Wood, notable tax lawyer in San Francisco, with Wood, LLP, says that this R & D tax credit is something most small business owners probably don't know about. While this law has been in effect for about 15 years, Wood says it has had something of a "tortured path," with numerous expirations. The biggest development in some years has been the announcement of these new regulations allowing small businesses to go back three years for amended returns to claim this credit.
When most people hear the term "R & D," they think of high-tech or research but a lot of this 20% tax credit does apply to those businesses not doing R & D, explains Wood. He urges small business owners to talk with a tax professional or accountant to go over the qualifying criteria, traps and planning ideas, because there are some preferences built into the credit. Wood also emphasizes good record keeping because generally speaking, when you're claiming this credit, unless the numbers are extremely small, they will be looked at.
Rob Wood is a tax lawyer in San Francisco with Wood, LLP. He spoke with Arizona Business News during his interview. Arizona Business News, sponsored by ASBA, is a featured network of Sequence Media Group.