Prospect and qualify for research and development

How to create outlook signature

contrary to popular belief r d credits are not limited to things that have not previously been done many think these credits are limited to new inventions like the cell phone or the light bulb but that's not the case the internal revenue service does not require that technology be revolutionary or new innovation to be eligible for these tax credits the only requirement is that products and processes must be improved stay with me and i'll tell you more [Music] hi it's david weiner mr cashflow and if you're new to the channel welcome hit the subscribe button down below or the subscribe link so that you don't miss any of the tips i have to share with you that can seriously impact your cash flow and bottom line help reduce your tax liability and keep you safe from compliance issues like this video and let me know if you have any questions on the topic of research and development tax credits i'll respond quickly and personally to help answer your questions in research and development there are some costs related to wages supplies and contract research that are eligible many times however taxpayers tend to overlook some of the processes and work that can be included to maximize the tax savings unfortunately those who could benefit from claiming research and development tax credits either fail to claim them or leave money on the table because they aren't aware of all of the activities that qualify for them r d tax credits are a dollar for dollar reduction in income tax liability that is either under utilized or not utilized at all every single year here are some often overlooked qualifiers for r d credits first of all cloud computing and network costs cloud computing server platform and saas software application innovation costs may be qualified research expenses that are eligible for r d tax credits leasing cloud computing time is often cheaper and easier than purchasing locally hosted servers and outfitting data centers these expenses may be eligible when the cloud servers are located away from the taxpayers premises and operated by another the taxpayer must not be the only or primary user of the cloud service for that to be true number two automation that improves efficiency of processes improving workflows and processes especially in manufacturing may also qualify by using process automation tools automated shelving labeling systems and the use of robotic arms are some of the process automation tools that may be involved in the case of the robot while the cost of the robot cannot be used for r d credits the time invested in designing the type of robot how and where the robot will be used and the testing involved may be qualified expenses third artificial intelligence and machine learning any process of product that uses machine learning or artificial intelligence to determine how to better accomplish the process or increase its efficiency qualifies for r d tax credits machine learning can assist in the decisions of where to place a robotic arm for the most efficient and effective use number four replacing an obsolete part or product with newer technology this is a very common scenario in which these expenses may qualify for r d credit a piece needs to be replaced as a part of a manufacturing process but the supplier no longer makes the part if a direct replacement cannot be found the taxpayer may change their product or process to accommodate a new part on the market requiring some design changes these changes may be related to size functionality geometry or other elements but when the obsolete part is so old new technology may also provide a better answer than a retrofit research and testing must be done to accommodate the new technology if the taxpayer can provide proof of concept demonstrate how the new technology improved their product or process and document the failure points they may be able to recoup the amount expended for design and testing the wages related to a marketing associate who provided the design input to the improvement or features that that should be created throughout through the new technology can also be included but they must be able to show documentation of the individual's contribution in the process and also that they had the sufficient technical experience necessary to participate in the design process these are a few activities that might be overlooked in considering expenses for the r d tax credit in manufacturing products and processes it's not an exhaustive list but it may help in thinking through how to maximize your research and development credit activities don't have to necessarily fit the textbook definition of research to qualify if you've got questions about r d tax credits or their application please leave me a comment on this on this video or contact me directly at the information that's listed in the video description our consultations are always free and i'm happy to try and answer your questions we have a team of experts who can certainly answer your questions if i can't regarding this topic cost segregation 179 2014 tangible property regulations and the real estate professional designation are all our specialties don't forget to leave me your questions in the comments and subscribe and hit the bell to be notified when new cash flow building videos are posted cash flow strategies after all it's your money keep more of it you