R&D Tax Credits

Benefits

• Millions of dollars of federal and state income tax refunds.
• Lower overall effective tax rate for the company or the partners/shareholders of flow thru entities.
• Additional cash to invest back into their business and R&D operations.
• Unused credits are useable against future income taxes up to 20 years.

OUR PROCESS

FREE INITIAL ASSESSMENT

During the free assessment, we will obtain an understanding of your company’s operations in order to verify that your company is a good candidate for the R&D tax credit and also to provide high level
credit estimates for the open tax year(s) in question. During the assessment, Think
will typically have an assessment call with a key person at the company or we
may request some high level information via email. We will also assess and review
utilization of any potential credits with the company (i.e., will the credits result in
refunds and/or reduced taxes or will they carry forward).

PHASE 1: INTRO/STUDY DESIGN

During Phase 1, Think interviews key company personnel to identify projects, processes, departments and technologies where potential qualifying research expenditures exist. In addition, we evaluate the type and availability of contemporaneous documentation to substantiate the qualified research expenditures. We then design a study plan around your circumstances.

PHASE 2: IMPLEMENTATION

In Phase 2, Think will interview additional
personnel, analyze contemporaneous documentation, match wages and other
costs with qualifying projects to finalize the credit calculations, and gather
documentation needed to complete the analysis. This phase entails a full analysis
of technical issues related to qualified R&D projects, identification of all eligible
expenditures, and documentation of such expenditures.

PHASE 3: REPORTING

This phase includes the final preparation and delivery of the R&D Study and its quantitative and qualitative components, which will serve as the company’s documentation supporting the R&D tax credits claimed. The reporting phase also includes the preparation of any amended tax returns by the company’s CPA.

Recent Enhancements to the Credit

Beginning in 2016, there were also two significant enhancements to the Federal

R&D Tax Credit involving the credit’s utilization:

• Companies with less than $50 million in gross receipts (prior 3 year average) can now use Federal R&D tax credits to reduce Alternative Minimum Tax (AMT). This is very significant, especially for flow-thru entities, whose owners are in or close to AMT each year.
• “Start-up companies” (companies with less than $5 million of gross receipts for the year and with no gross receipts more than five years ago) can now use their Federal R&D tax credits to reduce a significant portion of their Federal payroll taxes.