The Business Owner's Guide to Research and Development Tax Credits

The passage of the "One Big Beautiful Bill" creates a significant opportunity for business owners, particularly with Research and Development (R&D) tax credits. It restores immediate expensing for domestic R&D expenses, allowing businesses to deduct these costs in the year they are incurred, rather than capitalizing and amortizing them over time.

For small businesses, this benefit is retroactive to the end of 2021, with a grace period for those with gross receipts of $31 million or less. Additionally, the bill allows for the immediate expensing of qualifying structures, with construction starting after January 1, 2025.

To find out what you could be eligible for, complete this short assessment.

What You Need to Know

Strengthened and Extended Incentives:

The bill increases R&D tax credits, making them easier for small businesses to access and encouraging investment in innovation without added tax pressure.

Eligibility Is Broader Than You Think:

Many small businesses qualify for R&D credits if they develop or improve products, software, or processes—even if they don’t see themselves as “R&D” companies.

Potential for Large Tax Savings:

The bill can greatly boost your R&D credits, allowing for major tax savings and more funds to invest in your business growth.

R&D Credits Are Now More Accessible:

It’s now easier to claim R&D credits. Review your innovation activities with a tax advisor.

Future-Ready Incentive for Innovation:

These permanent changes ensure ongoing support for innovation in your long-term business planning.

What You Need to Do

Immediate Expensing for Domestic R&D:

Starting in 2025, businesses can deduct domestic R&D expenses immediately or amortize them, improving cash flow by lowering taxes.

Retroactive Relief for Previously Capitalized R&D Expenses:

Review your R&D expenses from 2022–2024 and consult with a tax advisor to determine if you qualify for retroactive relief and to plan for amending prior-year tax returns.

Enhanced Section 41 R&D Tax Credit:

The R&D tax credit is still available and can be claimed with immediate expensing. File IRS Form 6765 and keep detailed records. Small businesses can also use the credit to offset payroll taxes.

Consult with a Tax Advisor:

Consult with a tax advisor to understand how the OBBBA provisions impact your specific business, implement necessary changes to your financial plan, and navigate the complexities of R&D tax strategies.

The Cost of Fragmentation

If you’re a business owner, fragmentation in the financial services industry is costing you in ways you probably don’t recognize.

You probably have a CPA, a financial planner, banker, etc. that you talk to from time to time, but when was the last time they talked to each other?

In the process of selling your business, uncoordinated efforts between brokers, attorneys, bankers, accountants, and valuation experts are highly inefficient. Each operates in their silo, leading to miscommunication, duplicated efforts, missed opportunities, and costly delays that will dramatically diminish your return on investment.

There is a better way.

Set Up a Meeting

Let's talk about your goals, your challenges, and identify areas for improvement. If there is a fit, we can execute a no-cost assessment that could have a significant impact on your financial future.

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