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The federal Research & Development (R&D) tax credit has been an important savings tool leveraged by businesses since it’s inception in 1981. While it has been modified to permit broader access, the incentive has helped thousands of companies offset the cost of eligible activities. A key aspect of the credit is the ability to claim and deduct eligible expenses in the year incurred. This not only allows companies to experience immediate savings, but provides the funds needed to maintain, or even expand, research activities. In other words, the credit has long been an important savings tool for many engaged in innovation.

On March 8, 2023, the Biden Administration released the proposed Budget of the U.S. Government – Fiscal Year 2024. The document outlines the President’s spending priorities for the coming year, details policy objectives, and detailed descriptions of how the changes will impact each Department, starting with Agriculture and concluding with the Social Security Administration. Buried deep in the long document are important updates and changes to the Internal Revenue Code (IRC) including tax incentives, tax rates, and the addition/extension of certain tax benefits.

Employer-sponsored retirement plans are an essential benefit offering and tool for employees to fund retirement savings. The savings crisis has been in full focus over the last few months due to the SECURE Act 2.0. This legislation calls for several changes impacting plan administration, participant benefits, and even tax incentives for new plans. The gradual phase-in of required changes and updates has naturally been top of mind for many. This is especially true because of the time needed to update plan processes and procedures.

The Research & Development (R&D) tax credit can provide significant savings to businesses conducting eligible activities. It has become an attractive tax incentive as over the last 15 years the number of companies claiming the credit has almost doubled. It may come as no surprise that the opportunity to deduct eligible expenses in the year incurred is one compelling reason. Unfortunately, changes made in the Tax Cuts and Jobs Act (TCJA) now require eligible research expenses claimed under Section 174 need to be capitalized and amortized. In other words, taxpayers can no longer capture immediate savings. Concurrently, businesses are also required to make a change of accounting method to comply with these new rules.

The SECURE Act 2.0 was signed into law at the end of last year and makes several important changes to help alleviate the retirement savings crisis. Built on the change made in the SECURE Act of 2019, the latest version offers many benefits to both employees and employers. To facilitate additional savings, several new provisions have been added to expand eligibility, extend RMD requirements, and require auto-enrollment and escalation for eligible employees. To entice employers to offer plans, the legislation provides several new tax incentives for plan startups, eliminates notice requirements for non-participants, and made it easier to resolve plan errors.

While retirement has long been considered a time for rest, relaxation, and rejuvenation, the unfortunate reality is this may be out of reach for many. Although there are many contributing factors exacerbating the situation, it appears that lack of workplace retirement plan coverage is the main cause. Without employer-matching contributions, it is difficult for most workers to accumulate retirement savings. Given this, it is no surprise that 22% of Americans have less than $5,000 saved and 15% have nothing saved at all. This alarming trend has prompted Congress to act by making additional retirement plan reforms. Despite this, it may be several years before the full benefits of the SECURE Act 2.0 are realized.

There has been much discussion in Congress over the last few years on how to update and reform retirement saving rules. The unfortunate reality is that many Americans will not have enough to retire. It is a serious issue when one considers that the average working household has virtually no retirement savings. Several studies have illustrated the depth of the problem and just how many will be forced to work beyond the traditional retirement age. The lack of access to workplace retirement plans and limited savings have intensified the issue.

The 2023 filing season for Georgia state income taxes officially began on February 1. While returns are being accepted for last year, there are several new tax credit programs in effect for 2023 and beyond. In addition to updates for the standard deduction and online sellers, new tax credits are available for donations supporting various programs. This includes the Qualified Law Enforcement Donation Credit, Qualified Foster Child Donation Credit, and the Georgia Heart Hospital Program.

The appeal of electric vehicles (EVs) is one that attracts the attention of organizations, families, and individuals. The combination of reduced maintenance expenses due to fewer mechanical parts (no spark plugs, no oil changes, and regenerative braking) lower operating costs. Beyond practical savings, many buyers are also attracted by the federal tax credit of up to $7,500 for eligible EVs. Taken together it is easy to see why EVs have become so popular. To demonstrate this point, a survey found that in Atlanta alone, there are 36,000 registered EVs, with 1,100 charging stations available across the metropolitan area.  

Extra fees that businesses pass on to consumers, like convenience, processing, and service fees, may now be subject to sales tax in certain states. These fees are a way to recoup the costs of doing business without increasing the prices of goods and services. If businesses fail to properly account for the sales tax implications of extra fees, it could unknowingly violate state sales tax rules. Affecting Atlanta area companies, Georgia and South Carolina recently issued guidance to help businesses better understand state and local sales tax compliance requirements.