Overwhelmed by Manufacturing Tax Credits
Tax credits and deductions can allow your company to save money, improve production quality and increase revenue. But with a lot of information available about a variety of programs, it can be difficult to understand which ones are best for your facility.
What do you already know about two of the most-used manufacturing provisions?
A couple of the common benefit available to manufacturing business include the following:
- R&D tax credit. The biggest misconception is that research and development applies only to scientific advancement, but that isn't how it works for this tax credit. There are a lot of details that go into the process of claiming the R&D tax credit that your manufacturing company can benefit from; so, it is important to have all the right pieces in place. At one time, this credit was considered temporary, but changes in the law have expanded it to a permanent tax credit solution, which can allow your production facility to plan your projects based on the knowledge that you will receive this credit when filing taxes. Consulting a tax professional will be your best bet in determining how your manufacturing company can take advantage of the credit.
- The Section 179 deduction. Of course, any manufacturing business owner also knows that you can't run a company without investing in the right equipment. And, often this equipment is specialized and expensive. But Section 179 is available to offset some of those costs. With this tax deduction, you can deduct the full cost of any equipment, new or used, and software that you've purchased throughout the year. There are some restrictions and limitations that apply. The equipment has to be considered qualifying, which is why it is important to talk with a tax professional to determine what is best for your business.
Manufacturing businesses are complex, even if your overall concept is simple. It takes a lot of experience to run these organizations, but understanding taxes is not a requirement. That is what MHCS CPAs are for. We can help you manage these aspects of your business so you can concentrate on what matters most: your operations.
There is far too much to cover in either of these provisions to make online research the most effective tool for discovery. Before you make any decisions, you should consult with us. We can help you navigate the difficult process of learning about and qualifying for these manufacturing tax credits and deductions.
Give us a call today to see how we can help your business thrive.