Unlocking Hidden Value: The Overlooked R&D Credit

At Americore Group, we often meet business owners and executives who are surprised to learn that their efforts to develop more energy-efficient processes, equipment, or emissions reduction strategies could qualify for the federal Research & Development (R&D) tax credit. This powerful tax incentive isn’t just for high-tech labs or software startups—it’s available to a wide range of industries, including manufacturing, construction, energy, and more

Yet, industry data shows that only a fraction of eligible companies actually claim the R&D credit, with billions of dollars left unclaimed each year. The main reasons? Lack of awareness, misconceptions about eligibility, and the perceived complexity of the application process

What Qualifies as R&D?

The IRS’s Four-Part Test:

Permitted Purpose:

Are you developing or improving a product, process, or system? Efforts to enhance energy efficiency or reduce emissions often qualify.

Technological in Nature:

Does your project rely on engineering, physical, or computer sciences?

Elimination of Uncertainty:

Are you resolving technical challenges or uncertainties? Even if your research and development didn’t work out, you may still qualify for the R&D Program.

Process of Experimentation:

Are you testing, modeling, or evaluating alternatives to achieve your goal?

Common Qualifying Activities:

• Designing new or improved energy-efficient equipment (e.g., HVAC, lighting, industrial machinery)
• Innovating manufacturing processes to reduce energy use
• Developing sustainable building materials or smart grid technologies
• Experimenting with alternative fuels or emissions control systems
• Creating software to monitor or optimize energy consumption

Real-World R&D Tax Credit Program Examples

A manufacturer redesigned its production line to cut energy use by 15%—qualifying for significant R&D credits.

A renewable energy firm developed advanced solar panels, earning millions in credits for their innovative design.

A food processor implemented new waste-to-energy systems, reducing emissions and offsetting costs with R&D incentives

Another manufacturer worked to redesign its production line to cut energy use but the new equipment design didn’t work out.

Other Examples show that even incremental improvements—if they involve technical problem-solving—can unlock substantial tax benefits.

Why Are So Many Companies Missing Out?

There are several myths creating program confusion.  We work hard to clear the confusion and have included some of the commonly believed myths below:

Myth: “We’re not a tech company.”

Reality: Any business improving processes, equipment, or sustainability may qualify.

Myth: “Our project wasn’t successful.”

Reality: The credit rewards the attempt to innovate, not just the outcome.

Myth: “It’s too complicated.”

Reality: With expert guidance, the process is manageable—and the rewards are significant

The Value at Stake

The R&D tax credit typically offsets 6–8% of eligible research costs, dollar for dollar, against your federal tax liability. For small businesses, up to $500,000 can be applied against payroll taxes annually – providing vital cash flow for continued innovation

How Americore Group Can Help

Americore Group, based in Westlake Village, California, specializes in uncovering and securing these often-overlooked credits. Our consultative approach means out team works closely with your team to:

• Identify all qualifying activities (even those you may not recognize as R&D)
• Document and substantiate your claims to meet IRS requirements
• Maximize your credit and ensure compliance with the latest regulations
• Ready to discover if your business qualifies?
• Contact Americore Group today and let us help you turn your energy efficiency and emissions reduction efforts into real financial rewards.

Step 1: Identify the Sources of Financial Stress

The first step in solving financial problems is recognizing what’s causing stress or discomfort. Common financial pain points include:

Debt is a common Source of Stress:

High-interest credit cards, student loans, or personal loans can feel overwhelming if they’re not properly managed.

Lack of Savings:

Many people struggle with the inability to save for emergencies, retirement, or future goals.

Budget Issues:

Overspending or not knowing where your money is going can create financial chaos. For those who don’t know whether they are overspending, ask yourself if your credit card debt is constantly increasing.  Are you only making minimum payments? If you answered yes, it is time to either create, or to review and revise your budget.

Unclear Goals:

Without defined financial goals, it’s easy to feel stuck or directionless.

Investing Uncertainty:

Individuals can feel anxious about investing due to a lack of knowledge or fear of risk. Other’s have lost money on the market and think they can’t learn how to fare better the next time.

Your financial stress may stem from something else, such as medical emergencies or unexpected expenses. It is essential to take some time to evaluate your financial situation. What keeps you up at night? What areas of your finances feel out of control? These are your financial stress points.

Step 2: Understand the Root Cause of Your Financial Stress

Once you’ve identified your financial stress points, dig deeper into their root causes. For example:

• Are you overspending because you lack a budget?
• Are you unable to save because your income isn’t sufficient to cover your expenses?
• Are you avoiding investing out of fear or lack of education?

Understanding the “why” behind your financial struggles is essential to finding meaningful solutions. This step often requires self-reflection, and for many, working with a financial planner can help provide clarity.

Step 3: Create a Plan to Address the Stress Points

With your stress points and root causes identified, you can create a plan to address them. Here’s a breakdown of potential solutions:

Mitigating Debt:

Consolidate high-interest debt, implement a repayment plan (e.g., the snowball or avalanche method), and avoid taking on new debt.

Setting up Savings:

Set up automatic transfers to an emergency fund or retirement account, even if it’s a small amount.

Budgeting:

Track your spending and create a realistic budget to prioritize essentials and cut unnecessary expenses.

Investing:

Educate yourself on investment basics or consult with a financial professional to create a diversified portfolio tailored to your risk tolerance and goals.

Goal-Setting:

Write down your short-term and long-term financial goals and break them into actionable steps.

Step 4: Continuously Monitor and Adjust

Financial planning is an ongoing process. Monitor your progress regularly and adjust your strategy as your circumstances change. Life is unpredictable, and your financial goals and challenges will evolve over time. Regular check-ins with a financial planner can help you stay on track.

The Bottom Line

Recognizing your financial stress points is an empowering process that allows you to take control of your financial future. By identifying the sources of stress, understanding their root causes, and creating actionable solutions, you can achieve greater financial stability and peace of mind.

Remember, no matter how overwhelming your situation feels, there are always steps you can take to improve it. Start small, stay consistent, and don’t hesitate to reach out to us for some no-obligation pointers as needed. Financial freedom begins with awareness and action.

By recognizing and addressing financial pain points, you can create a brighter financial future for yourself and your loved ones. Share these insights and tips with your audience to inspire them to take control of their finances today!

Living Within Our Means When Possible

The U.S. government is asking US citizens to reduce our consumption in the short term. While you may disagree with that approach, using it as your summer spending blueprint is a smart way to avoid your own budget shortage. The key takeaway? Spend intentionally on what matters most, cut back on wasteful habits, and invest in opportunities that can strengthen your financial foundation for the future. You don’t have to skip the vacation, but you might want to review your plan.

Here are steps to create a summer cash flow plan while keeping these broader principles in mind:

Review Summer Cash Flow Spending Priorities

Before summer kicks into full swing, take a close look at your anticipated expenses. Where do you plan to spend the most? Start by dividing your summer spending into essential and discretionary categories. For example:

• Essential Costs: This includes mortgage, car loans, utilities (which may rise with increased air conditioning use), childcare, and groceries.
• Discretionary Costs: Vacations, weekend trips, dining out, and entertainment.

Once you have a clear picture, decide what aligns with your financial goals and values. Much like the administration’s emphasis on strategic investments, focus your spending on activities that bring the highest value to you, your family, and your business.

Shift Toward Domestic and Cost-Effective Options

The push to redevelop U.S. manufacturing has highlighted the importance of supporting local businesses and reducing reliance on expensive imports. Apply this to your personal cash flow by:

Choosing Cash Flow Friendly Staycations or Local Trips:

Instead of splurging on an expensive international getaway, explore attractions or destinations closer to home. This approach not only saves money but also supports local economies.

Buying American-Made Products: From backyard grills to summer clothing, prioritize purchasing products manufactured in the U.S. They often come with better quality and help support domestic jobs, which benefits the broader economy.

Curb Impulse Spending

Just as the government is working to reduce wasteful spending, you can apply the same strategy to your personal budget. Impulse purchases—like expensive festival tickets, unless they’re part of your vacation plan; last-minute pop-up vacations; or luxury summer items that weren’t already in the budget—can all add up quickly. You can still enjoy some or all of these, just include them in the plan.

Create A Summer Cash Flow Plan Before You Go

Set a Weekly Allowance

Give yourself a specific amount of discretionary spending each week. Make a family game out of who saved what.

Use Cash or Debit When Out

There’s nothing like seeing the cash leave your wallet or bank account to remind you how much you’re spending as you’re making the purchase decision. That real-time perspective helps you stick to your budget and avoid overspending on credit cards.

Invest in Long-Term Value

The administration’s focus on economic redevelopment reminds us of the importance of long-term investments. You can still plan your summer vacation.  Just also allocate a portion of your summer cash flow toward improving your financial future:

• Pay Down Debt: Use any extra summer income to pay off high-interest debts.
• Boost Savings: Create or contribute to an emergency fund, retirement account, or even a college savings fund for your kids.
• Plan trips Celebrating Momentous Events: Graduation family trip, Junior got accepted in a celebrated firm, destination wedding.  Instead of just going somewhere – anywhere each summer, save up and plan for special events that are even more special for the wait.
• Invest in Skills: Take advantage of slower summer months to invest in professional development or learn new skills that could boost your earning potential.

Plan for Inflation

Rising costs are still a reality for many Americans. When crafting your summer cash flow plan, account for inflation by budgeting extra for groceries, gas, and other essentials. Look for ways to save, such as buying in bulk, meal prepping, carpooling or share summer activities with good friends.

Balance Fun and Responsibility

This summer, you don’t have to choose between enjoying yourself and staying financially secure. By adopting a cash flow plan inspired by the administration’s focus on curbing unnecessary spending and making strategic investments, you can strike a healthy balance. Focus on what truly matters, cut back on waste, and invest in activities and opportunities that align with your long-term financial goals. A thoughtful summer spending plan doesn’t just help you enjoy the season—it sets you up for success in the seasons to come. Contact us to set up your customize strategic plan.

1st Tax Incentives Such as Equipment Purchase Deduction (Section 179)

This tax incentives provision allows businesses to deduct the full purchase price of qualifying equipment and software the tax year of installation. For 2025, the maximum deduction is $1.25 million, with a phase-out threshold of $3.13 million. This means businesses can deduct up to $1.25 million of the cost of qualifying equipment. Additionally, the deduction begins to phase out dollar-for-dollar after $3.13 million in purchases. ​

2- Bonus Depreciation

In 2025, businesses can deduct 40% of the cost of qualified property when the property is placed in service. This incentive applies to new and used property with a recovery period of 20 years or less. It includes machinery, equipment, and certain improvements. Currently, bonus depreciation is scheduled to decrease by 20% each year. Of course the property in question must be used in your business for taxable income producing activities.

3- Research and Development (R&D) Tax Credit

Businesses investing in R&D can benefit from this credit, which encourages innovation by offsetting a portion of research expenses. The credit amount varies based on qualified research expenditures. It can significantly reduce tax liability for companies developing new or improved products, processes, or technologies. Often the application process is where businesses lose out on this credit. That is why we began helping clients navigate the required paperwork. Our current congress hopes to restore full R&D expensing along with 100 percent bonus depreciation and an easier formula for net interest expensing.

4 – Work Opportunity Tax Credit (WOTC)

The WOTC provides tax incentives for businesses to hire individuals from certain target groups that face significant barriers to employment. Groups such as veterans, ex-felons, and long-term unemployed individuals are included. The credit amount varies depending on the employee’s target group, wages paid, and hours worked. In a nutshell, potential credits range from $1,200 to $9,600 per qualified employee. ​

5 – Energy Efficient Commercial Buildings Deduction (Section 179D)

This deduction encourages businesses to invest in energy-efficient improvements to commercial buildings. Eligible improvements include energy-efficient lighting, HVAC systems, and building envelopes. When the improvements achieve a 50% reduction in energy and power costs comparatively. The deduction can be up to $1.80 per square foot of the building. ​

6 – Qualified Business Income (QBI) Tax Incentives

This deduction allows owners of pass-through entities (sole proprietorships, partnerships, S corporations) to deduct up to 20% of their qualified business income. For 2025, the phase-out thresholds for the deduction begin at $394,600 for married filing jointly. For other filers the deduction threshold begins at $197,300, adjusted for inflation. ​

7 – Removal of SALT Deduction Cap:

The State and Local Tax (SALT) deduction cap, previously limited to $10,000, is set to expire December 31, 2025. This change benefits businesses operating in high-tax states by allowing a full deduction of state and local taxes paid. Potentially significant tax savings can result. ​

As business owners, you can benefit by staying informed about these incentives. Take a moment to consult with your with tax professional to effectively incorporate these into your tax planning strategies. Tax laws are subject to change, and professional guidance ensures compliance and optimization of available benefits.

Americore specializes in knowledge of many incentive and rebate programs. We can help you navigate changes and minimize the risk of unwelcome tax surprises with key strategies. You’re already taking the first proactive step in avoiding unexpected liabilities on next year’s bill – get informed.

Stay Informed

Information is key. That’s one reason we help our clients keep abreast of updates from the IRS. We want to keep your informed about changes in the tax laws and regulations that could apply to you. The 2024 tax relief laws may affect your situation. Contact us to discuss whether it affects you.

Plan Ahead

We can help you to assess your financial situation, including income, expenses, investments, and deductions. It is important to anticipate potential tax implications under each new law. Familiarize yourself with the recently modified tax brackets and rates to accurately estimate your liability for the next year.

By taking these proactive measures, you can minimize the risk of unwelcome tax surprises and position yourself better next year. Embracing a proactive approach to tax planning will enable you to make more well-informed financial decisions for next year.

Learn About Programs For Your Situation

Tax incentive programs are designed to encourage specific behaviors. They provide tax benefits for investment in certain industries, energy efficiency, charitable giving, and more. By strategically using these programs, you can reduce your liability and minimize the risk of unwelcome surprises. The 2024 Tax Act introduces provisions impacting existing incentives, creating opportunities for taxpayers to optimize tax planning.

Organize Financial Records

Maintain accurate and organized financial records throughout the year to facilitate the tax preparation process and minimize the risk of errors or oversights. Keeping thorough records of income, expenses, investments, and deductions will streamline the filing process and reduce the likelihood of encountering tax surprises.

Explore Retirement Savings Incentives

Maximize contributions to retirement savings accounts, such as 401(k) plans, IRAs, and other qualified retirement plans, to take advantage of tax-deferred growth and potential deductions. The Tax Relief for American Families and Workers Act of 2024 may introduce changes to retirement savings incentives. The makes it critical to stay informed about these provisions to optimize your retirement planning.

Invest in Opportunity Zones

The 2024 Tax Act includes provisions related to Opportunity Zones. Opportunity Zones refer to designated economically distressed communities where investments are rewarded with tax incentives. By investing in these qualified projects, taxpayers can potentially defer or reduce capital gains taxes, support community development and still manage their liabilities.

Consider Energy Efficiency Credits

Explore programs that promote energy-efficient home improvements, renewable energy installations, and environmentally friendly practices. 2024 changes may introduce or modify tax credits related to energy efficiency, making it essential to evaluate these incentives when planning for home upgrades or sustainable investments.

Charitable Giving and Donations

Leverage incentives associated with charitable contributions by donating to qualified charitable organizations and causes. The Tax Relief for American Families and Workers Act of 2024 may affect the deductibility of charitable donations, so understanding these changes and aligning your charitable giving with the revised provisions can help you optimize your tax planning and support philanthropic initiatives.

Small Business and Entrepreneurial Incentives

Explore incentive programs aimed at supporting small businesses, startups, and entrepreneurial ventures. The 2024 Tax Act may introduce provisions to incentivize small business growth and innovation. It is essential for business owners to stay informed about these opportunities to minimize unexpected tax liabilities.

Education and Training Credits

Take advantage of incentive programs that promote lifelong learning, skill development, and educational advancement by exploring credits and deductions. Stay informed about changes to provisions to better optimize your tax planning strategies while investing in personal and professional development.

Adjust Withholding and Estimated Tax Payments

Consider adjusting your withholding allowances or estimated payments to align with the changes in new tax rates and brackets. Adapting your withholding and estimated tax payments helps you avoid underpayment penalties and unexpected bills at yearend.

Explore Retirement Savings Incentives

Learn how to maximize contributions to retirement savings accounts, such as 401(k) plans, IRAs, and other qualified retirement plans. New IRS rules may introduce changes to retirement savings incentives. Stay informed about these provisions so you can optimize your retirement planning and tax efficiency.

Invest in Opportunity Zones

The Tax Relief for American Families and Workers Act of 2024 may include provisions related to Opportunity Zones. These zones refer to economically distressed communities, areas that offer tax incentives for investments. By investing in qualified Opportunity Zone projects, taxpayers can potentially defer or reduce capital gains taxes. It is one more way to leverage tax incentives to reduce liabilities while supporting community development.

Consider Energy Efficiency Credits

Explore tax incentive programs that promote energy-efficient home improvements, renewable energy installations, and environmentally friendly practices. Recent revisions may introduce or modify energy credits, making it essential to evaluate these incentives when planning for home upgrades or sustainable investments.

Charitable Giving and Donations

Leverage tax incentives associated with charitable contributions by donating to qualified charitable organizations and causes. Check each year for changes that may affect the deductibility of charitable donations. That information can help you align charitable giving with the revised provisions . You can better form a plan that allows you to also support philanthropic initiatives.

Small Business and Entrepreneurial Incentives

Explore incentive programs aimed at supporting small businesses, startups, and entrepreneurial ventures. Annual changes could introduce provisions to incentivize small business growth and innovation. That’s why it is essential for entrepreneurs and business owners to stay informed about these opportunities.

Embracing a proactive and informed approach to tax planning helps you optimize financial strategies and support community development. With the right knowledge and assistance, you could also reduce your anual bill .

The biggest obstacle we regularly face, is helping our clients understand government programs are real and legitimate. Those programs are the way our government encourages desirable business behaviors. You might already be practicing the behavior the government wants to reward you for doing. Why wouldn’t you accept their appreciation when it helps grow your business. To ignore the programs is to leave money on the table.

Americore Experience Yields Results.

For thirteen years Americore helped over 5000 clients receive money owed or save on tax bills. There are myriads of programs available to small and midsize businesses, yet they are rarely ever employed by those they were intended to help. Americore is intimately familiar with those programs. We know the documentation and information required for each program. We also know the proven program parameters and our clients have benefitted from our experience for years.

Our Knowledge Saves You Time.

That means we can quickly recognize which program will fit your business. The downside to using government programs is that the paperwork is cumbersome and complicated. The Upside to working with Americore, is that without any up front payments, we can guide you and your team through the application process. Trying to navigate the application process on your own often results in denials. Understanding application questions and program requirements is essential to receiving funds. With over thirteen years of experience, Americore has the expertise to guide you to approval time after time. Imagine your team, instead of applying and reapplying, working with Americore and getting the approval the on the first submission.

Instead of wasting time on programs that don’t fit, have your team or financial advisor talk to an Americore representative about which programs do fit. You can focus on plans that you and your firm are much more likely to benefit from. And that benefit comes much sooner than if you went after the wrong programs.

Learn if You or Your Business is Owed Incentive Money

Learn if your business is owed incentive, credit, or rebate money by speaking with an Americore advisor. We know the programs because Dennis Bays, CEO of Americore, has spent years investigating financially beneficial programs for clients. It is amazing to realize how rarely financial advisors use this prolific source of cash flow for their clients. Today, our focus is on guiding more business owners to funding opportunities, facilitating business growth and development.

We have become intimately familiar with a myriad of program opportunities, and we constantly watch for new possibilities. We aren’t trying to replace your existing team, but to work with them to maximize your cash flow through seldom utilized programs. There is considerable funding available, and not asking for your share is a waste.  Talk to us. Americore has a history of finding the Credits, Rebates & Incentives that businesses qualify for, but rarely ever know about.

Starting the Conversation…

Are you one of the 5000 clients we have saved thousands of dollars or freed up to millions of dollars for operating capital? If not, we should have a conversation.

Call our office at 747-224-8110 or contact us here. Tell your Americore Group representative what you’re looking for, and we’ll tell you how we think we can help you make that happen.

Americore regularly works with a business’ existing team, their CPAs and Financial Planners. We also work with lenders like regional banks, investment banks, inventory and equipment lenders to bring improved liquidity to our clients’ businesses. We are a well-capitalized organization. Our nimble organizational structure offers clients and referral sources direct access to principals and decision makers.

The Entrepreneurial Spirit

Dennis comes from a family rich with entrepreneurial spirit. His father had a law firm and real estate brokerage firm among other businesses. Since Dennis Bays was a teen he has owned several of his own businesses, even while earning a W-2 salary in corporate America. Along the way, he discovered a love for the entrepreneurs of our country and has funded well over $100,000,000 for other businesses.

As for why he loves entrepreneurs, Dennis responded, “they’re the secret sauce… They create opportunities and industries; they give most of the rest of us opportunities to work. ”    

The Tax Code is NOT just for the Rich.

But many entrepreneurs seem to be facing a disparity. Taxes are considered an unavoidable liability. Still, we’ve all seen news reports of fortune 500 companies who don’t pay them. We’ve also seen billions of dollars handed out of government programs to those same big companies. The thing is, “the tax code is written for all businesses.”  And tax savings programs are NOT just for the “big guys”.

Sadly, while small businesspeople are focused on growing their small to mid-sized businesses, they miss opportunities. The fortune 500 companies have teams of professionals spending their days in finding and leveraging those same wealth building programs.

Tax Incentives for your Business

Tax incentives have become a way for the government to stimulate certain business  activities. Small businesses are often performing the same activities the rich are getting paid to carry out. Regrettably, the government is not great at promoting those programs to more businesses.

Americore makes it their business even the playing field for activities the government wants to encourage, even in small businesses. Since the government wants to foster these behaviors, they aren’t looking to punish businesses for using the related  program.

Still businesses hesitate to take advantage of available benefits. Whether it stems from unfamiliarity with the programs or incorrectly completed paperwork many entrepreneurs are missing out. By working with small to midsize businesses to correctly complete program documentation, Americore facilitates use existing program in the tax code.

As Dennis Likes to say, “CPAs help you with the [tax] loopholes; we help you with the programs.”  These are not just tax reductions or write offs. These are programs that release money set aside for certain government encouraged business activities.

Examples of Some of Dennis Bays’ Favorite Programs

You may wonder what type of activities the government rewards. You’ll be familiar with some, but we’ll go over a few anyway.

Everyone knows if you buy a house there is a mortgage interest credit. The government offers this tax break because a neighborhood with more homeowners is a more stable neighborhood than one with transient renters.

If you buy an electric car or solar panels for your home, the government will offer tax credits because they want the country to reduce carbon emissions.

For businesses who are looking for more better products or more efficient operation methods, there is an R&D credit. If you hire certain workers or have a business in a certain zip code, the government might help with your business costs.

There is also a program for employee healthcare insurance. If you offer health insurance to your employees, you can receive up to $2500 a year per employee.

These are just a few of many more programs out there, designed to encourage certain behavior.

Americore can help your business benefit from many of the same programs the “big guys” use. Call our office at 747-224-8110 or contact us here. Tell your Americore Group representative  what you’re looking for, and we’ll tell you how we think we can help you make that happen.

Tax Saving Action #1: Check Your Tax Withholdings

This one is a simple item to check off.  As a W-2 employee, even when it’s your company paying you, make sure you double check your tax withholdings.  The self-service IRS Calculator is free and it’s easy to use.  It is also a quick way to check whether the amount you withheld is the right amount from your pay.  Grab your most recent pay statements (and your spouse’s), other income information, and your most recent income tax return.

If you do not withhold enough in taxes, you might be surprised by how much money you still owe when you file your income taxes.  If you are withholding too much, you might get a larger refund, but you could be investing that money each paycheck. This tax saving action enlightens you on what to expect, allowing you to make an informed decision. 

The calculator is a nice tool for most people, but when your tax situation is more complex, it is better to use instructions in Publication 505

Tax Saving Action #2: Donate to Tax Exempt Entity of Your Choice

Usually it makes sense claim your charitable donations only if you itemize your deductions.  Before you donate, you can check the organizations Tax Exempt status by entering the organization’s name or employer identification number on the IRS Organization Search Tool.  Under the CARES Act, you can now claim up to $600 for cash donations by non-itemizers. When you know how much to donate, you have another tax saving action to take.

Tax Saving Action #3: Contribute to your Retirement Savings

There is still time to contribute to y our 401K retirement account.  You can still contribute until your last paycheck or December 31, 2021.  The contribution caps only apply to what you put in.  your employer’s contributions don’t count toward your aged defined additional 401(k) contribution limit.  Employers may have a longer period to make matching contributions. IRA contributions are different.  Those can be made until April 15, 2022.

Since we are mid-December, waiting is a bad idea.  Act now to get the corrections onto your last paycheck of the year. Wondering who to contact?  Normally, the human resource department of your employer handles that. 

Tax Saving Action #4: Retrieve Any Reimbursements Due for 2021

If you have a Flexible Spending Account, (FSA), that reimburses your out of pocket expenses related to healthcare or dependent care costs with pretax money.   Check with your employer on whether you need to use your FSA funds by December 31.  If you fail to do so, you could lose those funds, unless your employer uses a rollover feature or offers a grace period.  If you paid for healthcare and forgot to submit the paperwork, submitting now could be a nice reimbursement.

Tax Saving Action #5: Check your Stock Values

This one is not as clear cut as some of the other year end strategies.  Check your stock values.  Selling stocks that gained value and paying the capital gains taxes is a good strategy.  If you are in a lower federal tax bracket, you might not need to pay capital gains tax.  Even if you’re in a higher tax bracket, sometimes it makes sense to sell stocks doing well.  Re-buying them as a way to reset the baseline stock price and reduce future capital gains taxes. Become informed to know which tax saving action will benefit you most. 

Talk to your investment advisor if you already work with someone.  If you don’t already work with an advisor, we should have a conversation.  It costs you nothing but time and you’ll be glad you invested the time.

Business must be in certain industries. 

It is in the governments interest to encourage business in certain industries like Agriculture, pharmaceuticals, manufacturing, engineering, aeronautics and technology. Currently, tax incentives across US industries resulted in a reduction of $94,056,572 on a $358,916,354 total tax bill.  The manufacturing industry enjoyed a $37,384,236 reduction on a $115,469,502 tax bill, approximately a 33% discount. 

To encourage certain industries high in job provision and other national benefits, there are a plethora of incentives.  We are listing only a few of the options here. 

To find out more about surprising ways Americore can help your business improve your return on investment, contact us.

Accelerated Machinery and Equipment Depreciation Deduction. 

This deduction allows business owners to deduct their machinery and equipment’s depreciation value immediately.  By allowing the full amount immediately, it essentially gives businesses financial room to invest in equipment and machines for their factories.  In less than a year, the firm will recoup the savings on tax liabilities.

Graduated Corporate Income Credit

This tax return credit offers tax relief or businesses that earn high profits, so the owners can put more of that profit back into their companies.  In the graduated Corporate Income credit, the first $50,000 of a business income is taxed at 14%, graduating to 35% for income over $350,000. 

Creating a Number of Jobs

Domestic Manufacturing Deduction.  This deduction is designed to encourage US companies to retain domestic production jobs instead of outsourcing to an overseas factory.  If an American business manufactures products on US soil, it is likely to be eligible for this deduction.

R&D Tax Credits

The R&D Tax Credit is a misunderstood program.  You might think it would have stringent requirements, but the qualifiers are broad and accepting.  For businesses savvy enough to take advantage of it, the R&D Tax Credit can save substantial money.  There are four steps to the eligibility test for the R&D Tax Credit. 

• You need to show that you attempted to eliminate the uncertainty about development or improvement of the product or process. This must be on a fundamental level, and not reflect mere cosmetic changes.
• You must be able to demonstrate there is a process of experimentation, with simulations, modeling or testing.
• Your endeavors must be science or engineering based.
• There must be some measurable improvement in quality, reliability or performance.

Confused?  OK, here are some examples of areas of eligible innovations: software development, tool design, patents, environmental testing, automated manufacturing processes.

The differences between tax incentive programs is wide and full of misunderstandings. Some incentive plan requirements are stringent and others much more accommodating.  That’s why having a business advisory firm to guide you to the programs that best apply to your business can make a world of difference.  Americore professionals go further.  Americore guides your team through the application process.  We’d love to tell you more about Blue Apple Savings that make sense for your business.  Contact us  today to start the conversation.

Tax incentives are designed to increase a firm’s profitability by decreasing its overall tax burden. There are several forms of tax incentives:

Tax exemptions:

This tax incentive means firms are officially permitted to NOT pay certain liabilities.  Your accountant uses these to plan and prepare your taxes each year.  The IRS offers a long constantly evolving list of exemptions on their website.  Businesses can appreciate that exemptions lower the cost of doing business and increase the return on investment.  Governments employ the exemption tool because it increases the potential for new jobs and investment in economic development.   

Tax Reductions:

The amount of taxes a firm is required to pay is partially offset.  Unlike tax exemptions reductions still require the firm pay a portion of the liability.  There are still savings the business can enjoy. 

Tax Credits are More Flexible:

Tax credits are subtraction of a portion of a firm’s tax obligation.  Where deductions are reduction in taxable income, credits are direct reduction of taxes owed.  Credits can often be carried forward to subsequent tax years. Specific types of tax credits are offered to businesses in specific locations, classifications or industries.  They can also be implemented to mitigate economic circumstances, like the popular pandemic induced Earned Income tax credit.  Tax credits are more favorable to businesses because they reduce the actual tax owed, not the amount of taxable income.  Tax credits can be nonrefundable, refundable or partially refundable.

If a tax credit is nonrefundable, it can reduce the tax liability to zero, but cannot furnish you with a tax refund.  The refundable tax credit is paid out in full, even if that creates cash back to the taxpayer.  The taxpayer, regardless of the income or tax liability, is entitled to the entire amount of the credit.

Tax Refunds and Rebates: 

The firm must pay the full liability owed, but will receive a refund of part of the taxes paid.  Government tax rebates are designed to stimulate a flagging economy or to promote certain types of purchases.  A tax rebate is often unrelated to deductions and credits claimed.  Recent Stimulus payments issued to individual taxpayers are meant to help bolster an economy damaged by the pandemic shutdowns.  Examples of tax rebates include renewable energy rebates, hybrid vehicle rebates, medical plan rebates and more.

Americore found when a balance of rebate and credits are leveraged as part of business planning, business realize higher ROIs.  Americore uses programs called Blue Apple because they are so rarely found and used.  Blue Apple is not risky or unethical, in fact many of the programs used are government based.  They were created to develop businesses and economies in certain industries, geo locations or demographics.  When effectively use, Blue Apple incentive programs improve returns on investments, and open opportunities for growth or retirement.

AmeriCore was formed by dedicated professionals in the Finance and Financial Services industries with a unique outlook on problem solving. We use our relationships with hedge fund managers, CPA’s, tax attorneys, banks and other professional organizations to enhance our business advisory services.  We should have a conversation.  You’ll be glad we did.