Tax Incentives Review
The US and state governments offer numerous tax incentives, but many companies have not taken advantage of them and are not getting the benefits they deserve. At Gilmore, Jasion & Mahler, LTD (GJM), a Toledo CPA firm, we proactively monitor changes to federal and state tax incentives throughout the year and address any issues to improve your tax situation. Just a few of the tax incentives you may be eligible for are listed below.
Research and Development (R&D) Tax Credit
If your company has invested money, resources and time towards the improvement of your
products or processes, new regulations have made it significantly easier for you to qualify for
federal and state R&D Tax Credits. Benefits include:
- Increased shareholder value
- Permanent tax savings
- Lower overall effective tax rate resulting in an increase in cash flow and net income after taxes on financial statements
C to S Corporation Conversion
A careful analysis of your situation should be made before you elect an S-Corporation status.
This business structure can reduce exposure to the alternative minimum tax and accumulated
earnings tax, simplify unreasonable compensation issues and provide family income and estate
splitting opportunities. Benefits include:
- Elimination of double tax on earnings, the sale of assets or liquidation
- Cost-effective income allocation among family members with lower overall marginal tax rates
- Favorable tax rates on long-term capital gains
Interest Charge Domestic International Sales Corporation (IC-DISC)
If your company earns an annual gross margin of $200,000 or more in export transactions,
the IC-DISC structure provides a permanent tax savings of 20% to IC-DISC shareholders.
Benefits include:
- Reduced tax liability with a permanent reduction or indefinite deferral of federal/state tax (based on circumstances)
- A business structure that permits preferential pricing on export sales
- A non-cash compensation alternative of granting stock to key management personnel
