With the opening of a new office at 515 S. Flower St., in Los Angeles, Tax Point Advisors, Inc.’s tax credit consulting practice is now a coast-to-coast national consulting firm, assisting CPAs and their clients capture valuable R&D and other tax credits.  Tax Point Advisors, Inc. now has offices across the U.S., including Los Angeles, CA; Akron, OH; Boston, MA; Albany, NY and Houston, TX.  National toll free contact is (800) 260-4138.

Deadline Fast Approaching for Key Tax Credits

Many of Tax Point Advisors’ CPA partners and their clients have 9/15 or 10/15 tax deadlines.  This is a perfect opportunity to consider the potential of an R&D tax credit claim.

For example, a company with a 12/31 year-end, which extended its 2007 tax return and which is planning on filing on or near 9/15, has until the extended filing date before their 2007 R&D tax credit will expire.

Additionally, an S-Corp or other pass-through entity, for which the shareholders might have an extended filing deadline of 10/15, would have until that same October date to capture their 2007 R&D tax credit before it expires.  In other words, for a pass-through entity, the statutory deadline is determined by the deadline for the company owners, even if that is after the statutory deadline for the entity itself.

This can benefit your client both in terms of 2007 and 2010.  For 2007, as noted, the credit might be available as late as this October before the credit is then lost forever.  For 2010 tax years, there’s still time to claim the 2010 credit on a timely filed extended return, in order to avoid the need to amend at a later date.

Contact us to discuss your clients’ eligibility; there may still be time for them to benefit from the 2007 through 2010 available credits.

• Jeffrey Feingold
• Managing Partner
• jeffreyfeingold@taxpointadvisors.com
• 508-641-3884

R&D Credits available through 2011

Last night the House of Representatives passed the $858 billion extension of the Bush-era tax rates approved by the Senate on Wednesday. This bill includes extension of the Research & Development Tax Credit, which previously expired in 2009, to continue through 2011. With the bill’s success in Congress, the president is expected to sign it into law next week.

The extension of the R&D credit follows on the heels of the 2010 small business bill, passed in September (HR 5297), which permits businesses under $50 million in revenue to use general business tax credits – including the R&D credit – to offset Alternative Minimum Tax (AMT) in 2010.

“With both the extension of the R&D credit, and the new law allowing for the credit to offset AMT for the first time in history,” noted Jeffrey Feingold, Managing Partner of Tax Point Advisors, a leading U.S. tax credit consulting firm, “small and mid-sized companies across the U.S. will be able to qualify for and benefit from this valuable tax reduction program.”

CPAs and their clients who have qualified for R&D Credits in the past, or who previously have not qualified due to AMT issues, should re-consider this tax credit. Contact Tax Point Advisors at 1.800.260.4138, or at info@taxpointadvisors.com, to discuss how you or your client may qualify for the improved R&D Tax Credit program.

Tax Point Advisor’s R&D Tax Credit client, Yushin America, was featured by the New York Times as an example of the benefits of Obama’s tax cut package.

Yushin America is a Rhode Island company that produces and maintains robotic manufacturing equipment.  Tax Point helped Yushin America identify a high six-figure credit as a result of an R&D Tax Credit study, and Yushin tells the New York Times that these credits are “a chance for us to put it back into the business and grow”.  They expect to use the credits to invest in new machinery, new employees, and a new roof; they anticipate hiring at least four new engineers for their sixty-employee company.

Rhode Island’s WPRI News picked up the story, and asked Yushin how this small Rhode Island company made it into the Times article.  Yushin credited Tax Point Advisors, who, when contacted by the Times for a concrete example of how the proposal could encourage additional spending by manufacturing companies, highlighted the Rhode Island company.

Jeffrey Feingold, Founder and Managing Partner of Tax Point Advisors, notes “This current tax package contains an extension of the Federal Research and Development Tax Credit, which is a vital element of the continued economic recovery of the United States.  Thousands of companies benefitting from the credit are small to mid-size employers; these companies are the primary engine of job creation and growth during any economic recovery and expansion.”

“Approximately 25% of the businesses currently taking the credit have assets under $1 million, and include often-overlooked qualifying industries such as package design, engineering services, plastic mold injection, tool & die, and architectural” says Feingold. “These companies often think they do not qualify because they often do not own the product or deliverable that they develop for their clients, but there is underlying custom design and engineering activities that qualify for the credit.  CPAs and their clients who work on new, improved or customized products or processes should seriously investigate the tax benefit, as they may qualify for up to six- or seven-figure credits, for which they often don’t realize they are eligible.”

This year is the first time that 22 year-old Yushin America applied for the credit, and they acknowledge that it was thanks to the way that Tax Point helped management figure out how they qualified.

Contact Tax Point Advisors at 1.800.260.4138 or at info@taxpointadvisors.com to see how you or your client may qualify for R&D Tax Credits.

Links to above-mentioned news articles:

New York Times: http://www.nytimes.com/2010/12/14/business/economy/14tax.html?_r=3
WPRI: http://blogs.wpri.com/2010/12/14/cranston-firm-is-tax-deals-poster-child-in-nyt/

(Newswire Today) —  South Walpole, MA, United States, 09/28/2010 -

Businesses under $50m will be able to use general business tax credits – including the R&D tax credit – to offset Alternative Minimum Tax in 2010.

President Obama’s signing of H.R. 5297 this week marks a significant modification in the law for both corporations and business owners with respect to their utilization of General Business Credits.  Prior to this new law, the maximum amount of General Business Credits that a company or individual business owner could utilize in a given year could be no greater than the amount that their regular tax exceeded their AMT.  Likewise, they could not utilize any General Business Credits if their AMT exceeded their regular tax.  With H.R. 5297 in place, these limitations no longer exist.  General Business Credits can be utilized up to the full amount of the corporation or individual’s tax liability.  In addition, the new law allows for a carry-back of 2010 General Business Credits to any of the previous five years; whereas, the previous law only allowed for a carry-back of one year.

There are two very important points to keep in mind with this change, however.  The first is that only General Business Credits resulting from activities in the current 2010 tax year can be utilized, so you can not use credits that have been carried forward from previous years.  The second is that you can not offset AMT if you are carrying back credit from the 2010 tax year to one of the previous five years.

“This new bill is a significant benefit for many of our small to mid-sized clients across the country,” noted Jeffrey Feingold, Managing Partner of Tax Point Adviors, a national tax consultancy which specializes in government-sponsored credits and incentives. “Previously,” Feingold added, “many of our clients who qualify for R&D credits were unable to utilize the credits due AMT. This bill will begin to address that problem for the first time. Still, Congress should go one step further and allow the credit to offset AMT for prior years as well as for 2010.”