What CPAs Should Prepare based on 2024 Proposed Changes to Form 6765
Form 6765 is undergoing significant changes for tax year 2024. The changes are expected given the amount of attention the R&D tax credits have received by taxpayers, espcically for taxpayers claiming payroll refunds. Return-preparing CPAs and EAs should be aware that there are details requested as disclosure on the proposed new form, and the quality […]
How to Minimize Tax Impact From Section 174 Capitalization
Recent changes in tax regulations have significantly impacted how businesses handle research and development (R&D) expenses, especially concerning Section 174 of the Internal Revenue Code. Under the new rules, certain R&D costs must be capitalized and amortized over a five-year period for U.S. expenses and 15 years for foreign expenses. This shift has left many […]
A Boom for Startups in California: Leveraging the SSBCI Loan Program
Starting a new venture is always a thrilling yet challenging endeavor. One of the most significant hurdles for startups is securing adequate funding without imposing undue personal risk on the founders. The State Small Business Credit Initiative (SSBCI) loan program in California offers a lifeline for startups looking to grow and expand. Here’s how startups […]
Section 174 Update (2023 and 2024 Tax Years) – What CPAs have to do to Capitalize R&D Expenditures
The IRS released an advance version of Notice 2023-63 providing interim guidance intended to clarify the application of section 174, as amended by the “Tax Cuts and Jobs Act” (TCJA). The notice includes guidance addressing capitalization and amortization of specified research or experimental (SRE) expenditures under section 174, as amended. Based on our review and consultantion with […]
New Changes to R&D Tax Credit in 2023
2023 brought several changes to the R&D tax credit and its related provisions. As many of you already know, the R&D tax credit can be used to offset both INCOME taxes and/or PAYROLL taxes depending on your company’s eligibility status. Let’s start with the change that would be relevant to your entity’s income taxes. Some […]
83(b) Election – What A Founder Needs to Know
An 83(b) election is a provision under the U.S. Internal Revenue Code (IRC) that gives an employee the option to pay taxes on the total fair market value of the restricted stock at the time of granting rather than at the time of vesting. Here’s a simple example to illustrate how it works: Example Without […]
How VCs Make Investment Decisions
Venture Capital (VC) firms employ three primary investment decision-making models. The Studio Model favors a hands-on approach where studio operators work directly with founders on product-market fit (PMF) or the initial idea. These VC firms often specialize in a specific industry, providing sector-specific resources and easy access to investors. They look for companies that have […]
What is Research and Development Tax Credit?
The history of the R&D tax credit, also referred to as the Research Credit, started almost 35 years ago to allow businesses that leverage science and technology in their product or process development to reduce corporate income tax liabilities. But it wasn’t until recently with the passage of the Tax Cuts and Jobs Act (TCJA) in 2017 that this lucrative tax incentive credit became relevant […]