Clarus R+D has partnered with Alice, a digital platform that makes smart, instant connections between business owners and the resources they need to accelerate sustainable growth and global impact. Alice works by matching companies with opportunities, locally and online, that will help them start and grow a business.

Clarus R+D is a technology-driven solution for claiming R&D tax credits, making it easy for innovative companies to get this money back into their businesses to hire and grow. By partnering with easily accessible online business advisors, Clarus is broadening the impact of America’s largest tax incentive.

Clarus R+D will be working with the Alice team to educate its community on the R&D tax credit, how to claim it, and ways to maximize its benefit. R&D tax credits are a remarkably effective way to access cash for small businesses. But the process can be intimidating. Clarus R+D removes all the barriers and helps innovators every step of the way.

Read Alice’s guide to claiming the R&D tax credit

With tax season just around the corner, business owners will begin the sometimes harrowing task of filing their 2019 taxes. We understand that year-end tax planning can be overwhelming for startups and SMBs. With the passing of the Tax Cuts and Jobs Act (TCJA) of 2017, tax legislation changes have significantly impacted entrepreneurs. To optimize filing strategies, pay careful attention to all of your year-end tax actions. So what steps can you take now to simplify the process and maximize your tax credit?

1. Identify Activities that Qualify for the R&D Tax Credit

Remember, if you do anything technology-based, improve it, and sell it to customers, you probably qualify for both federal and state R&D tax credit. Many companies perform activities that qualify for the R&D tax credit without realizing it. Some examples of qualifying activities include:

• Designing, developing, or improving new products, processes, formulas or software or improving current ones
• Experimenting with code for new or improved software products
• Engineering to evaluate specifications for performance, reliability, quality, features, and durability
• Developing new production processes, including agile
• Improving a product’s time-to-market through more efficient designs
• Paying outside consultants or contractors for any of the above activities
• Incurring expenses for wages or supplies related to the above activities

2. Gather Documentation to Support R&D Tax Credit Claims

Identifying eligible activities is the first step in optimizing tax credits associated with R&D. The next step is to show documented proof of all qualifying activities. The credit can be claimed for the current and prior tax years, which makes it important to document eligible operations for all of the years the credit is claimed. Also, you can estimate some qualifying expenditures. However, you must base this estimate on facts. Examples of documentation to compile:

• Eligible employee wages
• Payroll registers
• Time tracking data
• Job descriptions
• Meeting minutes
• Ledgers outlining general expenses
• Relevant project lists and notes

Our team of R&D tax credit specialists is here to help. We partner with business owners in various industries to assist with year-end planning strategies that can help you optimize the benefit for your organization. Contact us today to schedule a free consultation with one of our tax experts.

Does your company operate in a state that could reward you for things you’re already doing? About forty states have their own R&D tax credit programs, with some even more valuable than the federal tax credit program. Since each state tax credit is different, it’s good to know whether your company can save through R&D.

Evidence shows state R&D tax credits have a significant effect on the rate of local entrepreneurship.

To promote growth and development, many states offer an R&D tax credit in addition to the federal tax credit. But unlike the federal program, some of the state tax credits are refundable, some are transferable, and still some are in states with attractive credit “buyback” opportunities. The definition of qualifying research activities may be similar, but the tax credit computation and other factors vary significantly from state to state.

The research and development tax credit is complex. From California to Pennsylvania to Georgia, we have expertise in many state level programs, as well as the federal R&D tax credit. To evaluate where you may be able to save on taxes and how you can use R&D incentives to boost your company’s bottom line, schedule a call with one of our tax experts. We’ll discuss R&D tax credit programs to help you determine eligibility.

Each year, the IRS publishes a Dirty Dozen list of common schemes taxpayers may encounter. Coming in at #7 on this year’s list, the IRS continues to see significant misuse of the research credit. Meant to provide an incentive for American industry to invest in research and experimentation, this credit has legitimate uses but there are specific criteria to qualify.

Clarus specializes in helping startups with the R&D tax credit. We simplify the process while maximizing the financial benefit. Most importantly, we do it right. We generate the proper documentation and partner with your tax preparer and payroll company to check all the boxes.

IRS Dirty Dozen 2018

1. Phishing
2. Phone Scams
3. Identity Theft
4. Return Preparer Fraud
5. Fake Charities
6. Inflated Refund Claims
7. Excessive Claims for Business Credits
8. Falsely Padding Deductions on Returns
9. Falsifying Income to Claim Credits
10. Abusive Tax Shelters
11. Frivolous Tax Arguments
12. Offshore Tax Avoidance

For more detail on this year’s Dirty Dozen, head over to the IRS newsroom.

Clarus R+D has partnered with Gusto, a payroll company based out of San Francisco and Denver. Gusto is fundamentally changing how the world works by empowering everyone to put people first. Gusto reimagines payroll, benefits, HR, and personal finance by automating the most complicated, impersonal business tasks and making them simple and delightful.

Clarus R+D is a technology-driven solution for claiming R&D tax credits, making it easy for innovative companies to get this money back into their businesses to hire and grow. By partnering with payroll processors, Clarus provides a “full service” solution that ensures customers monetize their credits.

Clarus will be working with the Gusto team to efficiently process their mutual customers’ tax credits and streamline the monetization process.

Recent changes to the federal R&D tax credit program provide a remarkably effective way to access cash for early-stage companies. But the process can be intimidating. Clarus removes all the barriers and helps entrepreneurs every step of the way.