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blackman on taxes Columnist Qualifying ExpEnsEs Once qualifying activities/projects have been identified, you must accumulate certain qualifying expenses to determine your R&D; credit. Internal labor (i.e., salaries, wages, bonuses), costs of supplies consumed and third-party consultant/ contractor expenses are the primary qualifying expenses. These expenses normally are incurred in many different areas of your business, not just in your R&D; or engineering departments. Of course, you must properly document any of these expenses in case of an IRS audit. It is essential to retain in an organized system such items as product and/or project specifications, descriptions or proposals; technical reports/test reports and results; patent applications and results; contractual agreements with consultants; and other documents that support your qualifying activities and expenses. typE of BusinEss fEDEral/statE CrEDit - 2011 total CrEDit for all yEars Manufacturer $29,200 $124,000 Foundry $112,000 $226,000 Metal Stamper $223,000 $1,532,000 The rewards of the R&D; tax credit will be easy to recognize. This table offers real examples of tax benefits realized by clients of Scott Schmidt, principal of the Black Line Group. Scott, considered a guru in the R&D; tax credit area, provided most of the information for this article. and you most likely will need professional help. Think of building a new plant or warehouse. You would not even think of doing so without hiring an experienced architect and general contractor. This tax incentive can benefit your company, but it also is complex. If you have been doing your R&D; credit planning internally, you probably have MaxiMizing your r&D; CrEDit Naturally, you want to maximize your R&D; credit, been leaving money on the table. The more HAIMER, the better. Universal 3D-Sensor Known as The classic To locate Reference edges on work pieces Number of needed trials 1 Number of measuring errors Application 0 All milling machines and EDMs Accuracy Highly precise, 0.0004'' More www.haimer-usa.com Haimer USA, LLC | 134 E. Hill Street | Villa Park, IL 60181 | USA | Phone +1-630-833-1500 | haimer@haimer-usa.com | www.haimer-usa.com 42 MMS September 2013 mmsonline.com Tool Holders Shrinking Technology Balancing Machines Measuring Instruments Tool Management