Fostering a Competitive Edge with R&D Tax Credits

Sikich’s 2018 Manufacturing & Distribution Report offers insightful thought-leadership, hard-hitting findings, and a forecast for the future of the manufacturing industry. This year, Sikich surveyed over 200 participants in the manufacturing & distribution industry to build our annual report, which analyzes key trends and opportunities for businesses and individuals in the field. Among the topics the report touches on, it examines Research & Development (R&D) tax credits and how tax incentives or deductions can help manufacturers increase competitiveness.

View the full report here: Sikich’s 2018 Manufacturing & Distribution Report

Find Tax Breaks with R&D Credits

Manufacturing businesses can qualify for R&D tax credits if they are developing a new product or improving an existing one. This year’s survey gathered that more manufacturers are aware of available tax credits in comparison to prior years. In fact, almost 60 percent of respondents reported that they are using R&D tax credits, proving that business owners are poising themselves to be industry leaders and increasing their competitive edge.

The report also stated, “organic growth in an existing domestic market and new product or service development ranked as the top two biggest growth opportunities,” at 41 and 28 percent respectively.

According to the survey, 67 percent of respondents said they plan to invest in manufacturing equipment this year, too. This is significant since tax reform provides other investment opportunities similar to the R&D credit, such as allowing organizations to expense their entire capital expenditures for equipment put into service during a specific time.
With just 60 percent of survey respondents feeling optimistic about the U.S. economy, it is important for manufacturers to focus on cutting expenses where they can—and R&D credits provide this opportunity.

Industry 4.0 is more than a buzzword. It’s a competitive differentiator. Every year, Sikich’s manufacturing and distribution subject-matter experts analyze the results of our manufacturing survey to compile a comprehensive report as a resource to our clients and prospects in the industry. For decades, we’ve successfully served manufacturing, distribution, and supply chain clients to help them reach their goals.

Written by Cheryl Aschenbrener, CPA, Partner, Sikich LLP.

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