The Startup Innovation Act of 2013, a new congressional bipartisan bill, promises a significant business entrepreneur tax break via a new research and development (R&D) tax credit.
If the law passes, it will allow businesses that are less than five years old and have less than $5 million in total revenue to claim a research and development tax credit of up to $250,000 against their employment taxes.
Companies typically deduct R&D expenses from taxable profits. This R&D tax credit has benefited larger, more established, companies, whereas smaller companies with tighter budgets are not as likely to take advantage of the credit. The proposed law tries to change this by allowing companies to deduct R&D expenses from employment spending if the company has not yet made a profit, thereby incentivizing entrepreneurs to invest in innovation.
Along with the changes that benefit startups and small businesses provided by the JOBS Act, this new law would offer a jumpstart to entrepreneurs considering the formation of new companies across the United States.
To determine how you might benefit from new legislation aimed at helping small businesses, call us today to schedule your comprehensive LIFT (legal, insurance, financial and tax) Foundation Audit. Normally, this session is $1,250, but if you mention this article and we still have room on our calendar this month, we will waive that fee.
