Unlocking Fall’s Potential: Exploring R&D Tax Credits FOR YOUR BUSINESS

Fall not only ushers in the beauty of the season but also the impending tax deadlines. For businesses, this period presents a valuable opportunity to explore the realm of Research and Development (R&D) tax credits. These credits can be a game-changer, potentially offering income tax and payroll tax benefits. Lets dive into the significance of R&D eligibility, helping you understand whether your company qualifies for these lucrative incentives.

Uncovering R&D Tax Credits

Research and Development tax credits are designed to incentivize innovation and technological advancement across various industries. This incentive is offered by the government to companies that invest in qualified research activities. As fall tax deadlines loom, it’s essential to assess your company’s eligibility for these credits, as they can significantly impact your tax liabilities.

Income Tax Credits vs. Payroll Tax Credits

Understanding the types of R&D tax credits available is crucial. Income tax credits provide a direct reduction in the taxes your business owes. On the other hand, payroll tax credits for qualified small businesses offer a unique advantage by allowing you to offset your company’s payroll tax liability. Exploring both avenues can yield substantial financial benefits. To be considered a qualified small business, the company must have gross receipts of less than $5 million in the current taxable year and no gross receipts for any taxable year preceding the five-taxable-year period ending with the current taxable year. This qualification opens up even more opportunities for payroll tax credits, offering a potential boost to your bottom line.

Assessing R&D Eligibility

Determining whether your company qualifies for R&D tax credits involves evaluating the nature of your research activities. These activities should align with specific criteria, including innovation, technological advancement, and the systematic process of experimentation. Engaging in activities that seek to eliminate uncertainty about the development or improvement of a business component could make your company eligible.

Key Considerations

  1. Qualified Research Activities: Identify the projects, processes, or software developments within your business that might qualify as eligible research activities.
  2. Cost Analysis: Examine your expenses related to R&D efforts, such as wages, supplies, contract research expenses, and computer lease costs which can contribute to the calculation of potential tax credits.
  3. Documentation: Ensure you have well-documented evidence of your qualifying activities, as detailed records play a pivotal role in claiming R&D tax credits.

Finvisor Can Help

Given the complexity of tax regulations and the nuances of R&D eligibility, seeking guidance from tax professionals or consulting firms specializing in R&D tax credits can be immensely valuable. Our experts can assist in identifying qualifying activities, calculating potential benefits, and ensuring compliance with tax regulations.

*This calculator is just an estimate and is not an official quote or guarantee. To fully understand how much you can save please contact us.

Take Action Now

As fall tax deadlines approach, taking a proactive stance on R&D eligibility could lead to substantial financial gains for your company. By exploring both income tax and payroll tax credits, you can potentially reduce your tax burden while fostering innovation within your organization. Embrace the season not just as a time of change, but also as an opportunity to explore the untapped potential of R&D tax credits.


Reach out to Clayton Vaughn to get the process started. 

Clayton Vaughn | R&D Tax Lead @ Finvisor

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To learn more about what we do, or to request a quote, contact us at hello@finvisor.com or 415-416-6682. We’re here to help you navigate deferred revenue journal entries so you can make the most of your assets!

*This blog does not constitute solicitation or provision of legal advice and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction.*



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