August 21, 2017
by Tracy Lustyan, alliantgroup Managing Director
The Business Journals
The world is going digital — and there is no place where this is more evident than in the world of media and advertising.
Effective user experience design and high search engine optimization rankings are just as important as the message itself, with marketing and media companies now leaning heavily on the work of their developers and other tech experts to remain competitive.
As advertising and media companies shift to digital, many can qualify for a substantial tax break that rewards their innovative work: the Research and Development (R&D) Tax Credit. If you have not heard of the R&D Tax Credit, there is a very good chance you have been missing out on substantial tax savings for your business.
Who qualifies for the credit — and why?
The R&D Tax Credit has evolved over the years for the benefit of U.S. businesses—and as a result, the credit is now widely available to digital marketers, advertisers, publishers and media companies.
These firms are some of the absolute best candidates for the credit because of a) the technical nature of their everyday work and b) the technical employees (software developers, programmers, data and analytics experts and others) staffed to complete these projects.
While many think of R&D as being only for large tech giants, the truth is that the design, development and technical work that is needed to enhance today’s digital marketing and media efforts usually qualifies for the credit. Oftentimes, small companies can obtain the same six-figure credits that are received by traditional software and tech companies.
Who qualifies for the credit?
If your company performs any of the following activities, your business could qualify for the credit:
- Developing software that is tracking, monitoring and optimizing marketing and advertising campaigns
- Writing algorithms for SEO, paid search campaigns or advertising campaigns
- Developing technological solutions to complex business challenges to meet client demands
- Designing the databases to provide improvements in efficiency, speed and user functionality
- Enhancing the data collection process associated with advertisements
- Developing Client Relationship Management (CRM) software or CRM bolt-on software
- Integrating CRMs with other marketing software or databases
- Applying business intelligence algorithms to improve functionality and reliability
Are you a candidate for the credit?
If you perform any of the above activities, it is highly likely that you qualify for the credit — and you should explore what could be a valuable opportunity for your business.
Over the years, the demands of the market have required advertisers and media companies to become more tech savvy — and now these companies are entitled to the same tax breaks as software and tech companies.
Tracy Lustyan is an expert on the Research and Development (R&D) Tax Credit and how it applies to innovative businesses. As a Managing Director at alliantgroup, Tracy has partnered with more than 225 CPA firms to uncover more than $380 million in government-sponsored tax savings for more than 900 companies operating in diverse industries, including manufacturing, systems integration, engineering and software.
Would you like additional information or do you have questions?