Tax Info

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Tax Info

Entity Type and Tax Form

Provide your company’s entity type (S-Corp, C-Corp, Partnership, or Individual / Sole Proprietor). The easiest way to check your entity type is to check the type of tax return you file. For instance, if you file a 1040 tax form and your business's income is computed on your individual return, you would select Individual. If you filed an 1120, or an 1120S, you would select C Corporation or S Corporation, respectively. And if you are in a multi-member LLC, select Partnership.

Tax Year End Date

All of your expenses need to be analyzed by tax year, this means that we need to determine when that tax year begins and ends. For most companies, their end date follows the calendar year and falls on December 31st. If you are a company that uses a Fiscal Year End, you will need to input that information here. You can find this information at the top of your entity tax return where it lists a beginning and end date. If the fields are blank, that means your company follows the calendar year.

Incorporation Date

The IRS requires that we put a start date on a company to help determine whether or not they qualify for the start up small business payroll tax offset. In addition, this information is also used to parts of the calculation to determine your final credit amount.

Filing Deadline

Your filing deadline varies based on the type of return that you are filing. For instance, if you are an individual filing a 1040, you have until April 15th of every year to file your return or request an extension which will push your tax return due date to October 15th of that same year. This information is important because it will set a timeframe for the R&D tax credit study. Missing this date, can cause you to lose your entire payroll tax offset benefit!

Short Year

Sometimes, due to changes in corporate structure or tax strategy, a company will create a short tax year that requires its own tax return. This results in multiple issues that directly affect the ability generate the R&D tax credit. Identifying a short year is critical to delivering accurate results. If you are unsure about this selection, please note that in most cases, companies are not in a short year. You can also consult with your CPA who will be able to provide clarification and insight.

Controlled Group

If your company shares common majority (51%+) ownership with other entities, they are considered to be part of the same controlled group. In these situations, the calculation for the R&D tax credit changes to accommodate the additional entities, while generating a single controlled group credit. This will not affect your ability to generate a credit, but may affect your eligibility for the start up small business payroll tax offset. Please consult with your CPA to determine if your entity is part of a controlled group.

Oldest entity in the Controlled Group

For purposes of the R&D tax credit, all controlled groups are considered a single entity until the credit gets distributed to the various component entities. As such, we need the information for the start date of the oldest entity to use as our start date for the controlled group's R&D tax credit calculation.


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