Your US company may qualify for an R&D tax credit if you have invested time, money and resources toward:
The credit is not a deduction, it is an actual credit against taxes owed or paid.
If you own or lease a building, cost segregation is a powerful strategy that uses a detailed engineering-based analysis to reduce federal taxes. Cost segregation provides accelerated depreciation benefits, improved cash flow and reduction of tax liability. Any building that has been constructed, acquired or renovated in the last 15 years, by a tax-paying company that does not show an operating loss or that will be profitable in the near future may qualify. For assets placed in service in the last few years, there may be special bonus depreciation for shorter life property.
Whether you’re running an e-commerce business, offering products or services across state lines, or hiring employees out of state, you need to be aware of your state and local tax filing footprint. Multi-state companies should be performing analyses to determine which states they are required to register for state taxes. By conducting such an analysis companies may also identify savings through tax exemptions, credits, or deductions, thus reducing the overall tax burden.
The Energy-Efficient Commercial Building Tax Deduction applies to expenses incurred for energy-efficient buildings, either new construction or retrofits. If your company owns commercial and residential buildings (4 stories or higher), you may be eligible for the 179D deduction. Designers of government-owned properties are also eligible for the tax deduction.
It is specifically for lighting, heating ventilation and air conditioning (HVAC), hot water systems, and building envelope. It provides a deduction of up to $1.88 per square foot for projects placed in service before 1 January 2023. Starting in 2023, the Inflation Reduction Act increased the tax deduction up to $5.00 per square foot. It also expanded the eligibility for design firms to avail the deduction on projects owned by other tax-exempt entities.
The §45L Federal Tax Credit is an energy-efficiency incentive for residential builders. It offers developers a means to offset the costs associated with building energy-efficient single family or multi-family properties. The $2,000 credit provides an offset against taxes owed or paid in the tax year in which the property is sold or leased. Taxpayers may amend the prior 3 tax years to claim credits. The Inflation Reduction Act extended the 45L tax credit through to 2032, and increased the tax deduction to $2,500 or $5,000 per dwelling unit for qualifying properties placed in service from 2023-2032, through Energy Star or Zero Energy Ready Home certifications.
For businesses that carry inventory of $3 million or more, implementing the LIFO inventory method can generate much-needed cash. LIFO subtracts inflation from inventory costs, reducing ending inventory value, increasing cost of goods sold and decreasing taxable income. As the cost of acquiring or producing inventory grows in subsequent years, so too will the cash savings generated from LIFO.
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