Page 101 - MetalForming October 2013

mulas or processes
• Create prototypes or models, including computer-gen-
erated models
• Automate, streamline or improve internal processes
• Develop or improve production, manufacturing process-
es, software or hardware
• Add or improve equipment
• Try using new materials
• Design new or improved tools, dies, molds or other
devices, or
• Hire outside consultants or contractors to do any of the
above.
If you have an R & D product-development or design
department, or provide engineering, design or testing serv- ices for your customers, qualifying activities likely are taking place.
Once qualifying activities/projects have been identi- fied, you must accumulate certain expenses to determine your R & D credit. Primary qualifying expenses include internal labor (salaries, wages and bonuses), costs of sup- plies consumed and third-party consultant/contractor expenses. These expenses typically take place in many areas of the business, not just in R & D or engineering departments.
Of course, you must properly document incurred, quali- fying expenses. To do so, retain 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
• Any other documents that support your qualifying activ-
ities and expenses, with an organized system in case of an IRS audit.
Scott Schmidt, principal of the Black Line Group (a mem- ber of the Precision Metalforming Association) and a mem- ber of my network of professionals, provided most of the information for this article. Using the R &D credit, Schmidt offers up the following examples of how much his clients have saved. (See table.)
Have a question? Contact Scott Schmidt at scott@black- linegrp.com. MF
Blackman on Taxes
Type of Business
Federal/State Credit for 2011
Total Credits for All Years
Manufacturer
$29,200
$124,000
Foundry
$112,000
$226,000
Metal Stamping
$223,000
$1,532,000
Brehm “Shimmy” Trim Dies and Tube End Trimming Dies
New,
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Contact us with your applications and let us see if shimmy trimming can simplify your process.
Call us today 937-253-6194
See this technology in action at www.vulcancut.com
P.O. Box 1305 . Dayton, Ohio 45401-1305 . Fax 937-253-1062 E-mail: info@vulcancut.com
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