Architecture and Engineering Client Saves Over $500,000 with R&D Tax Credits and Strategic Tax Planning

Without the help of an experienced tax expert, many businesses overpay on their taxes. Although the IRS tax code is a complex and intimidating beast, it offers many creative ways to lower an organization’s tax burden. But companies can’t take advantage of these cost-saving secrets if they don’t know they exist to help them with their tax strategy in the first place. 

At Cunningham and Associates, we’ve helped many organizations in various industries save thousands with R&D Tax Credits. The star in our latest success story is a member of the architecture and engineering industry. 

The Client

Our client is based in Bangor, Maine. The company serves clients across the US with the complex renovation and new construction projects. 

Like most of our tax strategy clients, this particular company came to us looking for advice on their taxes and ways to maximize their tax incentives. 

Could R&D Tax Credits work for a client in the architecture and engineering industry?

The short answer is yes. But many businesses think R&D Tax Credits don’t apply to them because they aren’t part of the scientific community. 

New clients often come to us thinking their workers need to be wearing lab coats and conducting experiments to get the credit. But that’s not true. 

When they were first implemented in the 1980s, the goal of R&D Tax Credits was to incentivize keeping manufacturing and business operations in the US. In 2016, the credit was revised further. Now, it applies to a broader range of industries and is easier to calculate. 

Businesses can get more dollar-for-dollar tax reductions for the following activities, no lab coats required:

• Design
• Process improvement
• Innovation
• Adoption of new business components
• Other daily business activities

When the client came to us for tax advice, our first order of business was to investigate their business activities to see if anything applied to the R&D Tax Credit. Here was our approach. 

Saving Our Client Time and Money on Taxes

Our customers are busy running their operations, and we understand how precious their time is. Our goal during the early stages of optimizing our client’s tax strategy isn’t just to save them money but also to save them time. 

It only took about an hour to meet with the company leaders to gather the necessary information. We were provided direct access to their system to skip the time-consuming process of conducting surveys and interviews with their employees. This way, we reduced the number of hours it would have taken us to interview and survey their staff by as much as 50 hours. 

Another strategy we use to save our clients time when creating a tax strategy is integrating directly with their current CPA. This enables their CPA to obtain the R&D Tax Credits in the most efficient way possible. 

Finally, we held individual tax planning meetings with each one of the company’s stockholders which helped our client maximize their tax incentive even further. 

The Results Are In

Through the implementation of C&A’s tax strategy, the Client reduced their overall taxes by $500,000 in year one. Additionally, we identified over $150,000 in evergreen annual savings. 

In The Future

Optimizing a tax strategy isn’t usually a one-and-done thing. We continue working closely with our clients and their CPAs to ensure they’re saving as much money as possible and keeping their tax burdens low. 

After we obtained the different incentives for our client, they invited us to join as advisors to their Board of Directors. In the future, we’ll continue to work on the company’s tax strategy. 

Find Out if You Qualify for R&D Tax Credits 

Your workers don’t wear lab coats, and you’re not conducting experiments. That doesn’t mean you can’t lower your tax burden with R&D Tax Credits. 

Give us a call today at (508) 797-5003. Or contact us online to see what tax savings you qualify for.