Reduce your startup's payroll taxes through the new Federal R&D Tax Credit

As an accountant I have had to shoot attempts at claiming this credit down time and time again. Unless you are doing cutting edge&#x2F;novel research into AI, machine learning, quantum computing, etc you will not qualify for the credit. Think about it this way, unless your research is something you could write a scientific paper on and have it published in a peer reviewed journal, it will not qualify.<p>Also, this is not a new R&amp;D tax credit, it was extended, again, for the umpteenth time. There were slight changes made in addition to the extension, but they did not change what qualifies as qualified research.<p>Gusto is trying to drum up business, that is all.

Patio11 says that US-based software employers should also look into the Domestic Production Activities Deduction:<p><a href="https:&#x2F;&#x2F;twitter.com&#x2F;patio11&#x2F;status&#x2F;879238827612684288" rel="nofollow">https:&#x2F;&#x2F;twitter.com&#x2F;patio11&#x2F;status&#x2F;879238827612684288</a>

Interesting and could be helpful, but I&#x27;d like more details about the &quot;new Federal R&amp;D Tax Credit&quot; specifically<p>Is it this (which does not appear to be new) or something else?<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Research_%26_Experimentation_Tax_Credit" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Research_%26_Experimentation_T...</a>

What sort of expensense qualify as R&amp;D? If I have a small SaaS business (operating as an LLC), does it even make sense to pursue this? I&#x27;m always looking for ways to reduce my tax liability as revenue is about 6x of expenses.

In the U.K. you can trade in your R&amp;D tax credit for cash.<p>Protip: Instead of living off savings it may be beneficial to lend money to your startup in order to pay you so the wage can count towards an R&amp;D credit. But make sure to see an accountant to make sure the numbers work in your particular case.

What if I have R&amp;D expenses in a side business- can I use the credit to offset my main job&#x27;s income tax?

The layers of control in the current economy seems boundless. Makes me want to join the goldbugs sometimes. Hard money seems so much simpler and freer. An anonymous, portable, fungible, hard to counterfeit and inflate, universal account of previous work value. People give it to you when you give them something or a service they want. It seems like a system of the people, by the people, and for the people.