Most would agree that being detail-oriented is an important trait of a good architect. As a result of this trait, good architects rarely make critical mistakes. Unfortunately, most architectural firms are missing a crucial detail that is costing them tens of thousands of dollars every year in additional taxes - the Research and Development ("R&D") tax credit. However, it is not too late to take advantage of the significant tax savings this credit offers.
When we hear the term "research and development" we often think of test tubes and beakers and assume that an architectural firm wouldn't qualify for the credit. However, the Internal Revenue Services' definition of R&D activities is much broader than our common use of the term. Qualifying research activity must meet a four-part test to be eligible for the R&D credit.
- Business component development or improvement
- Elimination of uncertainty
- Process of Experimentation
- Technological in nature
Many architectural firms are already meeting the four-part test, making them eligible for significant tax savings. However, because so few CPAs understand the R&D credit and its various applications, very few architecture firms are taking advantage of this lucrative opportunity.
Chad Lowe, a CPA, is a tax credits and incentives manager in the Sacramento office of Brown, Fink, Boyce & Astle LLP (BFBA), a regional CPA firm. Chad specializes in helping construction contractors, engineers and architects take advantage of the Research and Development Tax Credit.
Scott Godegast is a tax manager for BFBA. Scott's focus is helping companies take advantage of government incentive programs, specifically the California Enterprise Zone Tax Credit, to reduce their tax liability.
Lunch & Learn: Tax Credits & Incentives Available to Architecture Firms
Time: Noon - 2:00pm
Location: AIA East Bay Chapter Office, 1405 Clay Street, Oakland.
Cost: Free for AIA Members; $3.50 for non-members. $5 at the door. Registration required. Click here to register. Lunch provided.
1.5 CES LUs
For more information: 510/464-3600