What are Research tax credits?

Research tax credits are federal tax incentives under Section 41 that provide dollar-for-dollar reductions in tax liability for businesses investing in qualified research and development activities. These credits equal a percentage of eligible research expenditures, including wages paid to research personnel, supplies consumed in activities, and contracted expenses. The One Big Beautiful Bill Act allows coordination with immediate AI-driven R&D tax credits. However, Section 280C requires reducing R&D deductions by the exact amount of credits claimed to prevent double tax benefits on those same expenditures.

Related Terms

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What are Tax credits?

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Tax loss harvesting

Transform investment losses into strategic tax advantages and optimize your portfolio's performance with AI-driven precision.

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Child traditional IRA

Open a Traditional IRA for children with earned income. Contribute up to $7,000 annually with full deduction, giving them decades to grow tax-free.

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Employee achievement awards

Award your team for service milestones and safety achievements while maximizing allowable deductions up to $1,600 per employee.

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Health reimbursement

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Child & dependent tax credits

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Health savings account

Set aside money on a pre-tax basis to pay for qualified medical expenses to maximize tax savings opportunities.

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Work opportunity tax credit

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Oil & gas deduction

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Hiring kids

Reduce taxable income & self-employment tax by hiring your kids.

Home office

Deduct qualified expenses for using your home for business purposes.

Meal expenses

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Travel expenses

Businesses can deduct necessary travel expenses, like airfare and lodging, directly related to operations for tax savings.

Vehicle expenses

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Late S election

A Late S Election lets a corporation request IRS S corp status post-deadline.

Late C election

A Late C Election is a request to the IRS for C corporation status after the deadline.

Depreciation

Put your fixed assets to work for you by utilizing depreciation to find and compare tax savings in minutes.

R&D tax credit

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Clean vehicle

Businesses and Individuals can receive a tax credit for purchasing new eco-friendly vehicles. Individuals may also qualify on used eco-friendly vehicles.

Residential clean energy

Taxpayers who invest in renewable energy improvements for their home or second home may qualify for a credit to lower their income tax.

Augusta rule

The Augusta Rule lets homeowners rent their property tax-free for up to 14 days a year without reporting the income.

Roth 401k

Roth 401(k) lets employees and individuals make after-tax retirement contributions, offering tax-free growth and withdrawals.

Traditional 401k

Traditional 401(k) plans offer pre-tax retirement savings for employees, with companies reducing taxable income via contributions.