Themetal fabrication industry, often viewed as a straightforward manufacturingsector, presents a surprisingly fertile ground for claiming R&D taxcredits. While routine activities, like designing custom tooling, may nottraditionally fall under the umbrella of "research and development,"the government's definition embraces a broader perspective, encompassing manyof these common practices.
Here's where metal fabrication companies can benefit:
- Developing or improving production processes: This includes designing and creating custom tooling, jigs, dies, or even new equipment.
- Employee wages for these tasks: The time dedicated to such activities by the team qualifies as R&D expense.
- Materials used for prototyping and custom tooling: The costs associated with these materials are also eligible for the credit.
- Costs of the tooling and die casts themselves: This expansive interpretation allows numerous metal fabrication activities to qualify for R&D tax credits.
Exploring the potential of R&D tax credits can lead to significant tax savings and boost the financial health of metal fabrication businesses. By delving into this opportunity, companies can potentially reduce their tax burden and drive their operations forward.
R&D Tax Credit Qualification for Metal Fabrication
The company’s unique software platform required extensive research, development, and testing. Developed within an agile framework, the software had various aspects that qualified for R&D credits. This included everything from initial high-level architecture design to active development cycles, often referred to as “sprints.” The company also engaged in rigorous validation processes, involving multiple departments to run newly developed modules through comprehensive testing phases. These activities were pivotal in refining the software and fell under the category of R&D as they led to technological advancements in the mortgage banking industry.
R&D Tax Credits with GOAT.tax
With our consultative approach to the research and development tax credit, we invest time understanding each client’s history, current business direction, and future growth objectives. Each year we re-evaluate a company’s ability to accept the tax credit and provide on-going recommendations to improve the R&D tax credits process.