Benjamin Franklin said there were two certainties in life: death and taxes. As the owner of your dental practice, you know the importance of keeping up with your taxes. You also know how valuable it can be to utilize tax breaks. Did you know the dental industry experts at Bryant Consultants can assist with this? In this article, we’re going to explore the Research & Experimentation Tax Credit, and how you might be able to apply this to your dental practice.
What is the Research & Experimentation Tax Credit?
Also known as the R&D tax credit, this was introduced in legislation passed in 1981. After being extended several times, Congress eventually made the credit permanent in 2015. The credit is offered by the federal government as well as 35 states and intended to reward companies for making investments in innovation and process improvement. The credit consists of dollar-for-dollar tax offsets, which can be claimed on top of the normal deduction of your research and development costs. The average federal R&D tax credit yields 6-8 percent on qualified costs, such as wages to labor, supply costs, or payments to third-party contractors who assist in relevant activities.
Technology companies, engineering firms, and businesses in some sort of manufacturing field have claimed the credit. However, the R&D tax credit does not stipulate or exclude any industries from benefiting. That’s where it gets interesting…
There are four qualifications for the R&D credit
Permitted purpose
Eliminate uncertainty
Experimentation
Technological in nature
What dental procedures and processes meet these criteria?
If your practice offers any of these services or technologies, you might qualify for the R&D credit:
- Handling complex cases and/or procedures
- Using an on-site milling machine or having your own laboratory
- Creating new or improved techniques, processes, and/or methods
- Making use of new advances in technology
- Any creation or testing of prototypes
This year has been a trying time for all industries—and the field of dentistry is no exception. If you qualify for the R&D tax credit, this can be a major opportunity to improve the bottom line for your practice. Knowing how to claim the credit and get full benefits from it can be difficult—and time-consuming. The pros at Bryant Consultants can help. Our business advisors understand these credits, how to apply for them, and how to use them to provide the greatest long-term benefits for your practice. To find out more, contact us. With all going on in the world, we’re offering a complimentary one-hour consultation to dentists just like you. Contact Bryant Consultants by calling (877) 768-4799. We provide consultation, training, and coaching and will continue to post relevant updates regarding dental practice management. To ensure that you receive the latest updates, please follow us on Facebook and Instagram.
