Claim the R&D tax credit for your Dental Practice
Your business could save up to $250,000 through the R&D tax credit.
Dental Intel CPA helps you maximize your savings while doing the heavy lifting. We handle the whole process so you can skip the paperwork and get back to business.
How Dental Practices Qualify for R&D?
The R&D Tax credit extends to dental laboratories, but what activities do they need to be doing to qualify? Labs that are creating custom solutions for patients are the most likely to qualify due to the equipment and work necessary to produce custom work. Below is just a small sampling of the types of activities that can qualify a lab for the credit:
- Digital scans and oral impressions
- Designing restorative & prosthetic materials and equipment
- Experimenting with different designs and materials for prosthetics and appliances
- Crafting crowns, bridges, dentures, specialty appliances, orthodontics and implants
- Processing digital data from scans
- In-house manufacturing
- CAD/CAM imaging and milling of custom oral prosthetics.
Labs and practices that perform the above activities or similar work are eligible for the credit. As long as the laboratory is employing technologies, like digital scanners, CAD/CAM software, or 3D printers to create custom solutions for patients, the practice may be eligible to qualify for significant tax savings.
Claim the R&D tax credit,
without the headache
You could save thousands through the R&D credit, so it’s important it’s done right. We handle the tax claims process from start to finish and provide the necessary documentation to back up your claim with the IRS. Claiming the R&D tax credit can be complicated and tedious, but we make it easy.
End-to-end service
We handle the full R&D tax claim process for you. That includes identifying eligible R&D expenses, filing the right paperwork, and making sure your credit is accurately applied.
Meticulous documentation
Our combination of software and experts make the R&D claim process and your paperwork meticulous.
All-in-one support
With DI CPA you get bookkeeping, tax, and R&D credit support all under one roof. We already know your numbers from the ground up: That means we work fast and efficiently to identify expenses and maximize your savings.
Here’s how we streamline the entire process:
Frequently asked questions
If your business has less than $5 million in annual revenue, and it’s been less than five (5) years since your first gross receipts/sales, you can frequently reduce your Social Security Payroll tax liability under the PATH Act R&D credit. If you do not qualify under the PATH Act R&D Credit, you can take regular R&D Credit against income taxes (rather than against payroll taxes).
Qualifying R&D expenses and/or activities are those which pass this four-part test:
- Technical uncertainty. The activity is performed to eliminate technical uncertainty about the development or improvement of a product or process, which includes computer software, techniques, formulas, and inventions.
- Process of experimentation.The activities include some process of experimentation undertaken to eliminate or resolve a technical uncertainty. This process involves an evaluation of alternative solutions or approaches and is performed through modeling, simulation, systematic trial and error, or other methods.
- Technological in nature.The process of experimentation relies on the hard sciences, such as engineering, physics, chemistry, biology, or computer science.
- Qualified purpose.The purpose of the activity must be to create a new or improved product or process, including computer software, that results in increased performance, function, reliability, or quality.
Unlimited, if applying the R&D credit against income taxes. These credits can range between 5% and 15% of qualifying R&D costs. If taking the PATH Act R&D credit, a company can receive up to $250k against payroll taxes and take the remainder against income taxes.
As an example, for an unprofitable 5-person tech startup that has less than $5M in annual revenue with roughly 80% of time being spent on qualifying R&D activities, and average salary of $100k/year, the credit might be between $20k to $60k. Pilot’s fee is a small percentage of the total qualifying R&D expense and easily pays for itself by securing the R&D Tax Credit for you.
Yes, we can help you file an amended tax return to claim the R&D credit for previously filed Income Tax returns (past 3 years), but you cannot take the PATH Act R&D credit on an amended tax return.
We help businesses with all aspects of claiming these R&D Tax Credits. DI CPA will:
- Identify and calculate qualifying R&D expenses
- Prepare Forms 6765, 8974, and 941 to gain IRS approval of credit. If you use Pilot Tax, we’ll file on your behalf as well.
- Prepare all required supporting technical and financial documentation, including documentation of research time, R&D payroll expenses, etc. This is an important pre-requisite to support an IRS audit in case that happens.
- Coordinate with your tax preparer, payroll provider, and accountant to ensure your books and taxes are accurate
- Continually ensure the credit is applied correctly against your payroll liabilities
- Email and phone support with R&D credit experts
Yes, we can help support you in the case of an audit. For more details, please contact us.
DI CPA recommends anyone who claims the R&D credit to get a study done. An R&D study determines the total amount the business should claim and collects the necessary documentation to support that claim.
When filing for the R&D tax credit, you must submit the relevant tax forms to the IRS. However, you must also have the technical and financial justification of what you were claiming prepared in case the IRS audits your claim. If the IRS audits the claim and you can’t produce technical and financial evidence behind what you claimed, you will need to return the money and potentially pay a penalty. The R&D Tax program is on the IRS’s “Dirty Dozen List”. Once you’ve been audited, the IRS can also audit your claims for up to 7 years prior – so you need to make sure that each year’s claim has proper and thorough substantiation.
No, we like to handle the whole process in house. We feel more comfortable doing it this way for best outcome.
33 states currently offer an R&D credit. Generally, the states follow federal guidelines on what constitutes qualified R&D expenditures with few exceptions. Pilot will provide guidance on state level credits. For example, the CA R&D credit is non-refundable which means it cannot be taken against payroll tax. Work must be done in CA to be considered qualified and CA credits can carry forward indefinitely until exhausted.
Your full finance stack
DI CPA goes beyond tax credit claims services to offer everything you need for your business’s financial management
Bookkeeping
Our expert bookkeepers are supported by powerful software, ensuring books with unmatched accuracy. Plus, get industry-specific reports, with metrics that matter.
Tax
Get your tax prep and bookkeeping handled seamlessly, together. We file your business income taxes, including 1099 filings, and local and federal tax returns – so that you’re compliant with the IRS.
CFO Services
Need advanced finance support? We have your back. Get the expert CFO support for your business needs, from building budgets to fundraising preparation.
