President of National Tax Group Meets With Key Players in Tax Extenders Vote

Discussions regarding lucrative tax extensions continue

The House Ways and Means committee met on Tuesday, March 12th, to continue the discussion on the lucrative tax extenders first introduced by the GOP in November 2018.  The package intends to extend incentives including the 179D Energy Efficient Tax Deduction ($1.80 per square foot for energy-efficient commercial buildings) and the 45L Energy Efficient Home Credit (a $2,000 credit for the construction of new energy-efficient homes).

National Tax Group President Lee Ferry met with lawmakers right before the meeting on behalf of taxpayers nationwide to strongly encourage a push to approve the tax extenders. Ferry met with Representative Ralph Norman (SC), Congresswoman Judy Chu (CA), and other members of the committee to get a feel of what the general consensus regarding the tax extenders package being approved is. “They confirmed our confidence, and informed us that the Senate intends to pass the tax extender package”, Lee Ferry told his employees upon returning home from Washington D.C.

While it is unclear when the fate of the proposed tax extensions will be decided, both sides of the aisle agreed during the meeting that the unpredictable and temporary nature of the extenders do nothing but hinder the effectiveness of the extensions. Ferry explained the importance of permanent and reliable tax incentives during his discussions with The House Ways and Means committee.

We will continue to monitor the decision surrounding the tax extenders and keep you updated with the very latest.

Read the full proposed bill on the United States Government Website here.

Lucrative Tax Extenders to Be Discussed in Upcoming Meeting

Tax Package Intends to Extend Deadlines of Lucrative Tax Incentives

We have been closely and patiently following the status of the GOP’s End of Year Tax Package since it was first introduced to the Senate in November of 2018. Now, after months of discussion and no movement, the House Ways and Means Subcommittee on Select Revenue Measures will hold a hearing on tax extenders on March 12th, 2019. 

The hearing will discuss dozens of tax incentives that have expired, including the 179D Energy Efficient Tax Deduction and the 45L Energy Efficient Home Credit.

We are your trusted tax advisors to lean on once the tax extenders are approved, and are committed to helping you obtain the maximum amount of savings possible.

Read the full proposed bill on the United States Government Website here.

Software Development Companies – Earn Big for Thinking

Don’t Let Cash Slip Through the Cracks to the IRS

Software development companies are able to benefit significantly on their taxes through the Research and Development Tax Credit. These companies are constantly developing new prototypes and products in order to remain relevant and on top in a rapidly growing and competitive industry by performing research activities.

These research activities that are being performed as part of daily operations often qualify for the R&D Tax Credit. Many companies fail to take advantage of the credit simply because they don’t realize that the work they’re doing is qualifying.

Qualifying Research and Development Activities Include:

  • Programming software
  • Designing and developing new software
  • Establishing electronic interfaces and functional relationships between various software modules
  • Conducting requirements, domain, software elements or scope analysis for a new functional software enhancement
  • Developing new or improved technologies
  • Core infrastructure development

Up to 90% of a company’s annual eligible costs can be applied, dollar for dollar, against its federal income tax liability. The money claimed through the Research and Development tax credit can be used to subsidize amounts paid on the salaries of employees performing the research activities, supplies used during the research, contract research, and computer leasing. 

The research and development tax credit rewards businesses for taking innovative steps to develop or improve their products, processes, or software. Any company that fits these criteria and is performing research activities that pass the 4-Part Test created by the IRS is likely eligible. The work is already being done, so there’s no reason not to have your research and development examined by a third-party tax firm. 

If you own a software development company, there is no risk in reaching out to us for your FREE assessment of benefits. Contact us today. 

Hotel Owners – Are You Aware of the Significant Tax Savings Available Through Cost Segregation?

This engineering-based study is often misunderstood and underutilized, leading to unclaimed money slipping through the cracks to the IRS

Hotel owners are able to free up otherwise unused capital from their building and invest that money back into their business through a cost segregation study. Hotels that have been constructed or renovated to include energy-saving systems that reduce the property's total energy consumption can benefit from a cost segregation study.

As a company full of tax experts with over 50 years of experience working in the tax saving industry, we’ve heard every misconception in the book when it comes to cost segregation and why hotel owners are hesitant to believe that they’re eligible to benefit from it.

All hotels can benefit from having a cost segregation study performed. Even if a study has been performed in the past there could still be additional hidden, unlocked capital that has yet to be claimed. We’ve dug deep into the most common misconceptions surrounding cost segregation and have responded, respectfully debunking the concerns.

Debunking the Myths of Cost Segregation

If you don’t have a cost segregation study performed within the first year of purchasing a hotel property, you're out of time and can’t have one performed.

This is not true. You can have a cost segregation study performed on your property at any time during your ownership and are able to catch up by taking advantage of accelerated depreciation you would have received in the first year. In order to do this, you must file a Form 3115 Change in Accounting Method. National Tax Group will complete your Form 3115 for you as part of the process.

Only a CPA can provide a cost segregation study.

This is not true. Tax experts with a background in engineering and construction are the best individuals to take care of the engineering-based study for your property. National Tax Group does partner with CPA firms to provide cost segregation studies for their clients, as well as have our own private clients that we provide these services for.

Cost segregation increases your risk of an audit.

This is not true. However, having your cost segregation study methodologies and procedures accurately documented by a third-party tax group is essential to passing an audit. At National Tax Group, we guarantee a marginally low risk of ever being audited and provide full and complimentary audit support if ever necessary.

I am not eligible to have a cost segregation study performed because I am planning on selling my hotel property in order to buy another.

This is not true. If you’ve recently sold properties but haven’t yet filed taxes or reported the sale, you can still have a cost segregation study performed in order to maximize your deductions.

There is no benefit of having a cost segregation study performed if the value of my hotel is too low.

This is not true. A cost segregation study can be performed on a hotel with a basis as low as $500,000. Don’t count yourselves out of benefiting from this lucrative cost-effective study before talking to our team of professionals.

Unlock the Hidden Capital in Your hotel

You may have more questions, and that’s okay because we’re here to answer them and stand by your side throughout the process. Reach out to set up your FREE assessment of benefits and get to know the truth about cost segregation and how it can positively benefit you.

There is no risk in reaching out for your assessment of benefits, only potential savings.

Getting to Know the 179D Energy Efficient Tax Deduction

Reduce energy consumption, increase tax deductions

Going green and transitioning into using eco-friendly materials in buildings has become increasingly popular as it benefits the environment, while also lowering electricity bills. The 179D Energy Efficient Tax Deduction is a significant tax break that rewards the energy efficiency of a building with cost-effective deductions on tax returns. Buildings that have been designed, constructed, or renovated to include energy-saving systems that reduce the total energy consumption by 50% can qualify for the deduction.

Many different individuals can take advantage of the deduction, including commercial building owners and contractors, hotel owners, and architects and designers. A lot of elements that already exist inside of a building can qualify for this deduction.  

FAQ’s Regarding the 179D Energy Efficient Tax Deduction:

Q. How much money can be obtained through the deduction?

Earn up to $1.80 per square foot on each qualifying property, and save $.60 on each energy saving system.

Q. What are examples of qualifying energy saving systems? 

Qualifying energy saving systems include hot water systems, building envelope systems, HVAC systems, and interior lighting systems.

Q. Can I apply for the 179D deduction on the same building more than once? 

Yes, you can apply for the 179D tax deduction for the same building multiple times, but the amounts awarded cannot exceed $1.80 per sq./ft. overtime.

Q. What types of buildings can qualify? 

Commercial buildings of any type, including office buildings, industrial buildings, warehouses, retail spaces, multi-family homes, and apartment buildings. Parking garages, government-owned buildings, and hotels can also qualify.

Q. What exactly are ‘power costs’? 

Power costs are the highest monthly demand charges and associated taxes and fees related to the electricity spent.

Q. Does the tax deduction apply to both newly constructed and existing buildings? 

Yes. Any building that has been built or renovated to incorporate energy saving systems in order to reduce the building’s energy consumption can qualify.

Q. Can I qualify for 179D if I’ve purchased an energy efficient building?

No, simply purchasing an already existing energy-efficient building will not qualify for the deduction. In order to utilize it, the energy saving systems must have been installed as part of a plan designed to reduce total energy and power costs.

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You may have additional questions and our team of tax professionals is waiting to speak with you.

Contact us for your free assessment today.

Decision on End of Year Tax Package Expected in Coming Days

GOP Tax Package Looks to Extend Lucrative Tax Incentives

A decision of the GOP’s end of year tax package is expected to be made soon. If the bill is approved, it will be signed into effect by President Trump shortly after, impacting taxpayers.

Congress has been working hard behind the scenes to save the tax extender package and senators are urging to have the package added on to an upcoming government funding bill. 

The tax plan, originally introduced in November 2018 plans to extend profitable tax breaks available through the 179D Energy Efficient Tax Deduction and 45L Energy Efficient home Credit through the end of 2018. The passing of the bill will have a huge impact on many, including commercial building owners, hotel owners, home builders, and contractors. 

Our team of tax professionals is confident that the bill will be passed soon and we will update you with any and all developments. Once the bill is passed, we will be your go-to and trusted tax advisor to obtain the top-dollar savings.

Learn about the 179D Energy Efficient Tax Deduction.

Learn about the 45L Energy Efficient Home Credit.

End of Year Tax Package by GOP Still Under Discussion

GOP Remains Hopeful That the Bill Extending Profitable Tax Breaks Will Pass

It has been more than two and a half months since the GOP Chairman and House Republicans unveiled their tax plan that intends to extend significant tax incentives through the end of 2018.

Despite no movement being made before the end of the year, bipartisan discussions are still actively being held behind the scenes of Washington D.C., indicating that an update or decision on the matter will happen soon.

The end of year tax package, which was released by House Ways and Means Committee Chairman Kevin Brady (R-Texas) on November 26th, 2018, would have an impact on all taxpayers, including those who are able to take advantage of the 179D Energy Efficient Tax Deduction, and the 45L Energy Efficient Home Credit by extending tax incentives through the end of 2018. The tax package would also make adjustments to the Tax Acts and Jobs Act, as well as look to revamp the IRS.

Our tax experts at National Tax Group are actively monitoring the proposed GOP tax plan and will bring you updates as they become available. We are confident that the bill will pass and we can begin reaping the benefits soon.

Read the full proposed bill on the United States Government Website here.

Brewing Craft Beer Can Lead to Significant Tax Savings

Breweries are Cashing in on R&D Tax Credits

The craft beer industry has been exploding over the last few years, with breweries popping up across the country. One of the biggest selling points of craft beer is the innovation and creativity that goes into brewing each beer, including coming up with new flavor and aroma profiles, and formulas.

Trial and error and experimentation is also a part of the research and development process, making breweries a perfect candidate to take advantage of the Research and Development Tax Credit.

The R&D Tax Credit was created as an incentive for businesses to take innovative steps while experimenting and performing research activities in order to improve or develop their products, processes, and software. Breweries often miss out on taking advantage of the credit simply because they don’t realize that the work they are already doing on a daily basis qualifies them.

Qualifying research activities within the brewing industry include

  • Hopping techniques and variety development
  • Testing ingredient mixtures for desired product flavor
  • Developing fermentation processes and yeast strains
  • Developing new processes for bottling and canning
  • Developing new brew formulations
  • Designing bottles, bottle caps, and cans
  • Developing preservation chemicals
  • Developing new processes for water recycling
  • Developing ingredient mixing methodologies
  • Developing new or improved filtration methodologies

The Shelf Life of R&D Credits

Just like barrel-aged and stored craft beer can be enjoyed years later, the R&D Tax Credit can be taken advantage of retroactively, dating back three years from the current tax year. Breweries are already investing time, resources, and money into new techniques, formulas, and products. They might as well get rewarded on their tax returns for it. Breweries with an annual income of $5 million or less can also benefit from the credit by offsetting it against payroll tax liabilities.

Claiming your R&D credits may seem overwhelming, but it’s what we love to do. Contact us today and we'll start the process of obtaining your tax benefits. There’s no risk, only the potential for significant tax savings.

Get to Know the Speciality Tax Code you Can Obtain Before the March 15th Filing Deadline

Don’t File Your Tax Returns Until You’ve Spoken to Us

As the C&S Corporation and Partnership filing deadline approaches on March 15th, it’s important to take advantage of the cost-effective tax incentives you may not realize are obtainable. At National Tax Group, we focus on specialized areas of the tax code that rewards businesses for innovation and constant efforts already being done. CPAs can also reach out to have an assessment of their client’s work, to see what additional benefits we are able to obtain for them.

Below, are the areas of tax code we specialize in. Contact us to request your free assessment of benefits.

179D Energy Efficient Tax Deduction

Buildings that have been constructed or renovated to reduce the total energy consumption by 50% qualify for the 179D Deduction. Individuals that can obtain up to $1.80 per square feet on each property include commercial building owners, hotel owners, contractors, and architect and designers. Learn More about this deduction here.

Research and Development Tax Credit

Any company doing business in the United States can earn significant credits back on their taxes that they can use to offset the costs they spent performing research activities to develop or improve their products, processes, and software. Even startups and small businesses are able to benefit from the credit. Learn more about the credit here.

45L Energy Efficient Home Credit

Homebuilders and contractors can earn up to $2,000 on homes they’ve worked on to incorporate energy saving systems that reduce the home’s total energy consumption. Learn more about the credit here.

Cost Segregation

Cost segregation studies reallocate real and personal property and accelerate depreciation within buildings, freeing up cash that can be invested back into the building or business. Even if a building had a study performed in the past, it is possible to benefit from another. Learn more here.

The Difference Is Real

When you work with National Tax Group you’re working with real people who care about the relationships we create with our clients. With over 50 years of collective experience working in the tax-saving industry, as well as customer service relations, you’re not only getting tax experts in your corner but also trusted advisors. We are committed to saving you money, so contact us to get your free assessment of benefits and start the process of obtaining the documentation needed to submit to the IRS before the filing deadline.

Are you Documenting your Research Activities Correctly? The Wrong Answer Could Be Costing You Thousands

Don’t neglect important steps to claiming credits you’ve earned

Any company that is making an effort to improve or develop their products, processes, or software can likely benefit from the Research and Development Tax Credit. R&D is a dollar-for-dollar credit that businesses can use to offset against federal and state tax liabilities and to reimburse costs spent performing the qualifying research. In order to qualify, businesses must meet the standards put into place by the IRS.

Don’t Dismiss Documentation

Companies should take detailed notes, and save all paperwork acquired during the research and development process in order to ensure that the maximum amount of value possible is obtained through the credit. A lot of companies miss out on all of the tax credits they could obtain simply because they don’t have proof of all of their expenses. Documentation is also key to passing the 4-Part Test, put into place by the IRS. The test looks at the nature, purpose, process, and uncertainty of the research activities being performed. 

Our step-by-step guide to documenting research activities:

  • Technical Uncertainty: While doing the work, keep track of any documentation that describes the project and technical uncertainty pertaining to whatever it is you’re working on. Documentation of technical uncertainty can include time sheets, design materials, feasibility studies if applicable, project records, and meeting notes.
  • Process of Experimentation: Documenting your process of experimentation is more challenging because of the wide variety of ways experimentation can be done. Documentation includes simulations, design specifications, prototype suggestions, drawings from engineers, descriptions of lessons learned from project failures, and communications regarding testing methods.
  • Technological in Nature: Documentation to support the technological nature of a project can include gathering presentations and meeting notes, designs of system architecture, technical data, and source code to hand into your third-party tax advisors.
  • Qualified Purpose: Compiling documentation to prove the qualified purpose of your businesses’ research and development activities can include copies of internal presentations, project plans, the outline of benefits, meeting notes, and case studies.
  • Remember Third-Party Agreements: It is common for companies to work with outside contractors and vendors when performing their research activities. These outside vendors can provide assistance with many different aspects including research, design, and other services. Businesses must ensure they make copies of any contracts to submit to the IRS.

The Difference is Real

National Tax Group is comprised of in-house tax experts and engineers that specialize in the research and development tax credit. We are committed to each company that we work with and stand by their side from their initial FREE assessment of benefits, to the submission of documentation to the IRS. Contact us today to get started.