Identified $60,000 in R&D Tax Credits for Manufacturer of Custom Tools and Dies
An R&D Tax Credit study was performed for a client specializing in rapid turnaround and high volume engineering and manufacturing of custom tools and dies. The study identified $1,150,000 of Qualified Research Expenses (QREs) for the tax year 2015, resulting in a federal benefit of approximately $60,000 in tax credits.
Assisted Missouri Manufacturer in Securing $3.5 Million in Tax Incentives
Due to our familiarity with the Missouri Works program and the Chapter 100 Bond process, we assisted a Missouri-based manufacturer contemplating systematic plant expansion, equipment purchases and job additions in the procurement of state, city and local tax incentives in excess of $3.5 million.
Turned Research & Development Expenses into $30,000 in Federal Tax Credits
We recommended a manufacturing client consider a research credit study to determine if federal credits could be taken on their tax return. Based on findings of the study, the company spent quite a bit on research and development activities and resulted in a $30,000 federal tax credit.
Set Up an IC-DISC for Foreign Sales Resulting in Initial $32,000 Tax Savings
We assisted a client with setting up an IC-DISC (C Corporation) because of their substantial sales to foreign customers. The manufacturing company (S Corporation) calculates a commission based on foreign sales and pays it to the IC-DISC. This provided the S Corporation a deduction from ordinary income. The IC-DISC turned around and paid a dividend to the S Corporation for the same amount, and the IC-Disc pays no tax. The S Corporation reports dividend income taxed at 23.8% versus ordinary income taxed at 39.6%. For this client, that was a tax savings $32,000 in the first year.
Performed Research & Development Study that Saved Client Thousands
By performing an R&D study, we were able to successfully pinpoint actions taken by the client’s business which qualified for tax credits at the state and federal level. These credits translated into tens of thousands of dollars of tax savings for the partners of this flow-through entity.
Improved Management Processes at Manufacturer
At the conclusion of our initial audit, we submitted recommendations for improvement to management. Over the following three years, we worked with them to implement the suggestions that provided their organization with the most benefit. Management now has a greater sense of comfort over its inventory process and believes its internal controls are operating more efficiently and effectively.
Strengthened internal controls to reduce warehouse space
We were engaged to help a distributor study the way it tracks, values and records inventory. We uncovered numerous ways to improve internal controls, building internal confidence in the company’s inventory cost and cycle count processes. Through a review of the purchasing process, we helped the company identify excess and obsolete inventory, in turn reducing its need for warehouse space and leading to significant savings.
Structured equipment purchase for tax credits
Our work with a local manufacturer told us they were in a distressed area. When they wanted to make a $1 million equipment purchase, we helped them maximize their state tax credit, worth about $75,000. Three years later, they turned to us for assistance with a similar purchase.