$100K+ R&D Tax Credit You’re Leaving on the Table (No Lab Coats Needed) 2026

David Weiner (0:00): Are you quietly walking past a $100,000 or more in legal tax credits every single year? I'm not talking about some obscure loophole. I'm talking about the r and d tax credit. And, no, you don't need lab coats, patents, or a billion dollar tech company to claim it. If you run a construction firm, an architecture or engineering practice, a manufacturing plant, a software company, or any business where smart people are paid to solve hard problems, there's a very real chance you're donating a lot of money to the IRS and you don't even know it.

David Weiner (0:32): So today we're gonna show you how to stop doing that.

Brian Broussard (0:36): Welcome to the tax strategy playbook, the show where smart investors, business owners, and real estate pros learn how to win the game the IRS wrote. Each episode, we break down powerful strategies, expert insights, and real world examples that help you keep more of what you earn. Because here, it's not about working harder. It's about working smarter with your taxes because tax evasion is a crime, but tax avoidance is mandatory.

David Weiner (1:04): Welcome back to the tax strategy playbook where we give real estate investors, business owners, and entrepreneurs practical strategies to cut taxes, boost cash flow, and build long term wealth. I'm your host, David Weiner. In our last episode, last week, we broke down the final window for D, the energy efficient building deduction, and what you need to do before the 06/30/2026 cutoff. Today's part two of that, call it a mini series, and we're diving into the R and D tax credit, What it is actually in plain English, what kind of companies really qualify, how big the dollars can get, and how to know if your business is leaving serious money on the table. My guest again today is Brian Broussard, my colleague at CSSI, and my go to guy when it comes to R and D and 179D.

David Weiner (1:56): He's done this for a long time and he spends his days working with companies and other businesses to turn their everyday innovation and problem solving into real defensible R and D tax credits. He's helped countless owners and CFOs discover credits they never knew they qualified for, often in the 5 and 6 figure range. Brian, welcome back.

Unknown Speaker (2:15): Thank you for having me again, David. I appreciate it.

David Weiner (2:17): Good to have you here. Let's strip away the jargon because I know what people think when they hear research and development. Let's make this simple for everybody listening.

Brian Broussard (2:27): Sure. Mentioned it already. It's not lab coats and test tubes, right? It's more really simplified as a technical approach to problem solving.

David Weiner (2:38): Okay. So in plain English, what is an R and D tax credit? What kind of activities is it actually rewarding inside of a business?

Brian Broussard (2:48): So again, it is a tax credit, not a deduction. It is more beneficial than a deduction, but it is a dollar for dollar tax credit that companies can qualify for based on activities that basically a technical approach to problem solving activities. So we'll dive down deeper into a little bit more what that means with regard to a four part test and how we qualify those activities, and ultimately talk about those expenses that make up this credit.

David Weiner (3:15): Excellent. So what kind of companies do you see most often that qualify for this?

Brian Broussard (3:21): There's a range of companies that qualify, but I'd say that the top part of the companies I think would be more of like manufacturing and software development type companies. Manufacturing is just very broad in how many areas of manufacturing that we look at, from chemical to tool and dye to job shops. So manufacturing is really a big industry that qualifies for the credit. Software development is probably second on the list. And then you've got your architecture and engineering companies that can qualify.

Brian Broussard (3:51): There's also things like fashion industry can qualify agriculture. There's the biotech and the pharmaceutical industries. Those are also pretty good ones as well. So it's really not just directed at one type of industry. It really is based on the activities.

David Weiner (4:09): You and I are both connoisseurs of wine. What about like a vineyard? Would a winemaking company or even a brewery, I mean, they've got to test and try new things, would they qualify as well?

Brian Broussard (4:24): Absolutely. There's a lot of R and D that goes into that. There's a lot of uncertainty with different wineries, with different vintages, with different distilleries, breweries. So we're able to look at those activities. Because if you think about a lot of these breweries that craft breweries, every year they're always coming up with new types of beers.

Brian Broussard (4:42): I mean, I've seen grapefruit beer out there, which is crazy to me, But they had to go through an R and D process. They had to go through testing. So yeah, there's expenses there that they can generate tax credits as well.

David Weiner (4:55): I saw a dill pickle beer a couple weeks ago.

Unknown Speaker (4:58): You're seeing it.

David Weiner (5:00): I heard that there was somebody who made hot dog water beer. Not sure that I would want to try it, but they would qualify for research and development. They've got to decide what kind of hot dogs they want the water to be. And I guess

Unknown Speaker (5:12): there's something there, I'm sure.

David Weiner (5:15): So if somebody's sitting in a job site trailer on a plant floor in a software meeting or testing grapes for wine, what does qualifying R and D actually look like in their day to day work? What what we could talk about the four stage test. What is it that looks it looks like in day to day work?

Brian Broussard (5:34): Well, so let's let's kind of actually address the four part test because I can actually tie it to a little bit of other breweries and the wineries out there and kind of give maybe some examples of different activities. So this four part test, this is laid out in the code. Anybody can look it up under Section 41 of the IRS code. But basically, this four part test is what we use to qualify activities regardless of the industry, whether, again, it's the breweries or wineries or distilleries, or if it's a manufacturer or pharmaceutical company. Same four part test, we just apply it to the company and what the activities are.

Brian Broussard (6:08): So the first part of this four part test is it has to be a new or an improved business component, That's defined by six different areas. It could be a new or improved product, process, technique, invention, formula, or software. So with breweries, there could be multiple business components. There could be a new process. I'll give you an example of one here in a second, but a new process could be one.

Brian Broussard (6:35): A new formulation, that could be also another business component, a new product, something tangible that they're developing. So that's the first thing. And there can be multiple business components with a company. Figure out what the business component is, then move on to the second part, and that's technical uncertainty with the business component. And how are you going to do it?

Brian Broussard (6:52): What are the technical challenges that are involved with maybe this new brew that you're trying to come up with? You know, there's all different types of things that we can look at to figure out what those challenges would be. It doesn't have to be a certain amount of It just has to be one or more. Third part, process of experimentation, says we go through like a iterative design process or an evaluation of options or alternatives to address those uncertainties of a business component. So how many batches of brews are made until they get it right?

Brian Broussard (7:21): There's a lot of trial and error in there. And a lot of that stuff that they've spent on supplies, those materials, those raw material costs that goes into the brews, as well as the brew maker and the brewmaster's time. All that stuff can be looked at and be potentially captured towards a tax credit. And the last part has got to be technological in nature, meaning principles of the hard sciences, whether it's engineering, chemistry, physics, computer science, things like that, as opposed to soft sciences like sociology or psychology. So when you're looking at brewing, that's chemistry.

Brian Broussard (7:52): That's a mixture of chemicals and different formulations.

David Weiner (7:56): Yeah. Was thinking too, that third test in a software company, that's kind of like beta testing, right?

Brian Broussard (8:02): Yeah. There is a life cycle that software goes through from a platform, through that architecture platform, all the way till it gets out there tested and ultimately put into use. I have an example. One of my favorite wines, I'm not sure why I would say the name of it, but it's in California. This guy I met, and we're gonna be doing an R and D study for him as well, he made one of his wines like the Romans and the Greeks used to make it, And that's when he mixed it with 1% seawater.

Brian Broussard (8:33): Interesting. They age it in terracotta barrels. And so we went through this whole process of talking about how they do that, how they test it, how they come up with the right formulations. And now we're doing a study for this winery. Really interesting.

Brian Broussard (8:46): It's really good wine. You'd be surprised that you'd say seawater. It's got a little bit of a hint of sea salt, but it's actually very good wine.

David Weiner (8:53): I think sea salt makes everything taste better, so I could see that. So, okay, we've sort of killed the idea that this is just for lab coats and for big tech.

Unknown Speaker (9:04): Right.

David Weiner (9:05): Let's put some real numbers behind it so people can see what it looks like when you actually claim the credit. Can you walk us through a client anonymously? Of course. You've worked with where R and D credits made a big difference as far as dollars and cents. What were they doing on their projects that turned out to qualify?

Brian Broussard (9:24): I think maybe one of my favorite ones this is one of the ones that'll also really kind of play into the fact that, you know, this is definitely not a lab coat test tube type of company. So this is a law firm that we did an R and D study for. When you think about law firms, what's the R and D there? There doesn't really have any R and with a law firm. Well, this law firm actually deployed software developers because they are a patent law firm and they were developing in house patent software that is eventually being made available for lease license or sale.

Brian Broussard (9:56): So not only did the attorneys that own the law firm have software developers on staff, but they also had backgrounds in software as well as being attorneys. So that is one of the ones that we looked at that lawyers and software developers at these law firms make a lot of money. They're getting paid 200 to $300,000 a year. And when they're doing nothing but software development, we're able to capture all of those costs with regard to their wages. And I think that if I recall that we ended up capturing about, think it was about $6,000,000 in total salaries and wages towards R and D activities.

Brian Broussard (10:38): It's a pretty good sized law firm. And I think the total amount of people there was about 80 people. And I think that we took about 20 people or so, but some of these people that were working at the law firm are making $304,100,000 maybe even $500,000 a year. So when you add all those expenses up, we got about $6,000,000 of R and D expenses that basically translates to about 10% of that being a tax credit. So in that case, 6,000,000 translates to about a $600,000 tax credit.

David Weiner (11:10): That's pretty good. Does that, is that typical where it's 10% of whatever their expenses were or how does that work?

Brian Broussard (11:16): Typical, I'd say more than likely, yeah, it's about 10%. It can be less. There's

Unknown Speaker (11:25): a

Brian Broussard (11:25): thing called a base analysis that we have to look at because the R and D credit is a credit from increasing R and D from a historical point with the company to the current year. And so typically a lot of companies we work with are growing and their R and D in the past is a lot less than the current year, but some companies that might have a down year this year and they had higher R and D in the past, that 10% of those expenses might be lower. It might be 8%, it might be 5%. And if they had a ton of R and D in the past and not much in the current year, they could be based out, which means there's no credit because they just didn't have enough R and D to overcome that base period.

David Weiner (12:04): So it sounds like a company that's regularly doing R and D of some sort where ongoing development process improvement work, it could turn into a meaningful returning credit, recurring credit year after year, right?

Brian Broussard (12:20): I'd say that every one of my clients that we have, we've been doing studies every year for. The only time I'd say we stop doing studies if they get bought out or they retire and close the business. But yeah, this is a yearly thing because most companies that do R and D are constantly innovating. They're constantly keeping up. Software is a huge one right now because of all of the AI that's out there.

Brian Broussard (12:43): So everybody's trying to adapt to AI and developing new platforms that can handle this AI software.

David Weiner (12:49): Big time. Big time. Yeah. So what actually goes into determining the credit? Is it just wages or is it also product that's tested and not used?

David Weiner (13:01): And how does that, how does that work? What goes into it?

Brian Broussard (13:03): Good question. So there are three main buckets that, make up this credit. Well, three buckets. The first one, the main one I would say is the employee wages. So we're able to allocate an employee's time towards R and D activities and basically put that into a bucket of what we call QREs, which is our qualified research expenditures.

Brian Broussard (13:23): And once we take all the employee's time and allocate R and D accordingly and put it into our bucket of QREs, that right there is one bucket of costs that we have towards the credit. The second bucket can be supply costs. And supply costs are defined as raw materials that are consumed in the R and D process that do not have a shelf life of longer than a year. If it has a shelf life longer than a year, then it's probably a piece of equipment that's being capitalized and you can't capture that towards R and D. But think about manufacturing companies who are developing a widget or whatever it is, the raw materials that go into developing that new or an improved product, we can potentially capture those supply costs towards our credit.

Brian Broussard (14:01): Our last bucket that we look at is outside contractor expenses. And those are defined as basically ten ninety nine or companies that are being outsourced towards your R and D. It has to be in The States. If you outsource things overseas, we cannot capture that stuff because it kind of defeats the purpose of increasing R and D here in The States. But there's the potential we can capture 1099s towards your R credits and as well.

David Weiner (14:29): What about travel that would be involved?

Brian Broussard (14:32): Good question. So I have a lot of people that ask me that they travel all over the country, going to different shows, trying to get ideas for different products that they're working on. Unfortunately, does not qualify. Travel expenses do not fall under the qualifying expenses. It's actually expressly mentioned in the code, stuff like that, even patent expenses, law, firm expenses, things like that, that go into maybe a new product or travel.

Brian Broussard (15:00): Those are all specifically excluded from qualifying for the credit.

David Weiner (15:04): Well, that just kind of leads me into the next question because we want to keep people away from wishful thinking. We want them to understand what the credits are, but keep away from wishful thinking. There specific activities that you see that do qualify but don't feel like R and D to them or that don't qualify that they think might?

Brian Broussard (15:25): Sure. I'd say that the activities what I get a lot from engineering companies is that when we look at, let's just say it's a mechanical engineering company or an MEP, mechanical, electrical, plumbing, engineering company, the design work they do on projects, that can qualify towards a credit. Now, an engineer just thinks that all they do every day is just do design work. It's their job, right? That right there, what they don't realize is that the code is more expansive on what R and D is.

Brian Broussard (15:52): And it goes back to that four part test. And when you look at an engineering company and the design work that they're doing from a business component standpoint, that's going to fall under a new or an improved process because every project they work on is a different project with its own different challenges. There's the uncertainty part. And they're going to work through those challenges through different design iterations and hopefully come up with a solution. There's your process of experimentation part.

Brian Broussard (16:16): The tech in nature, engineering is a hard science. So those are types of companies that think that their everyday activities is just something they do. They don't even think about qualifying. And those companies are typically the large companies that typically generate the larger credits because they have nothing but engineers on staff. They don't have a lot of overhead staff.

Brian Broussard (16:35): So they typically have a bunch of technical people on staff and they typically generate larger credits.

David Weiner (16:42): That makes sense. On the other side, what are some things that people assume are R and D that really don't qualify? So if you have a couple of clear examples of nice try, but no, I would assume travel falls under that category. What else?

Brian Broussard (16:55): Yeah, travel, but also some people think about like reverse engineering. And while there, if you think about it, you think about that's kind of like an R and D activity. You're taking something apart, you're trying to figure out how to reverse engineer something. Well, code says no. That's not something that we can capture towards R and D.

Brian Broussard (17:15): So that's an example of R and D. I would say that some people that think they're doing R and D and if they have a lot of government clients, while they may meet the four part tests, there's some other requirements that have to basically be looked at to qualify for the credit and really it's economic risk. So while they may be meeting the four part tests and think they do R and D all day long, if certain contracts are written a certain way, or if intellectual property is not retained by the taxpayer, even though they meet the four part test, they might not qualify for R and D. So there's different things we have to evaluate. A lot of variables that go into it.

David Weiner (17:52): That makes sense too. And I am assuming that there are people who think, we got this made and it's kind of, Nope, sorry.

Brian Broussard (18:00): Yeah. It's unfortunate because once you get through explaining everything, they're excited. They think that a 100% of what they do is R and D. Then once we dive into the second part of it, and we understand that there's a lot of government contracts, have to talk about those and make sure that they meet that portion as well. So every call is different.

David Weiner (18:19): But it's important that they find out so they don't try to claim it and then wind up talking to the IRS later on and getting all that reversed.

Unknown Speaker (18:27): Absolutely. Absolutely.

David Weiner (18:29): So let's talk a little bit about documentation because they they're going to have to have evidence. So what kind of evidence do you really need to support an R and D credit?

Brian Broussard (18:37): So that really is the key, honestly. The IRS is really big on documentation and substantiation. Now, here's the thing though, not all companies track things the same way. Not everyone uses time tracking. Not everyone uses certain contracts or different types of travelers, maybe through a manufacturing industry.

Brian Broussard (18:57): So every company is different. And IRSA's also understand that. But they still want to see some type of documentation that provides nexus, and nexus being qualified employees tied to qualified projects. If they don't have time tracking, there's other ways we can look at different things like emails. Maybe there's different types of paperwork that go through a manufacturing facility that people have to sign off on.

Brian Broussard (19:22): One of the kind of the strangest, I say, the strangest documentation of things I've come across was with that law firm, with the patent law firm. When he came up with one of the ideas for the software, he was literally in the shower and he jumped out of the shower, got a napkin and started sketching it out on what he wanted to do. And we know this because this napkin is actually framed in their office because this is where they got the original idea And for this so that is a form of documentation, right? So it's all different. It's just we've got to figure out what the client has available and see what we can do with that in order to put it into a package that can pass substantiation with the IRS if they were ever to challenge it.

Unknown Speaker (20:03): And that's what we can help them with.

Brian Broussard (20:05): And that's what we do. That's right. And that's why the CPAs don't want to really mess with the R and D. They always outsource that because they've the other thousand pages of the code to worry about. We specialize in about 24 pages of the code.

Brian Broussard (20:21): It's very involved. There's a lot of interviewing that goes on. There's a lot of documentation gathering. There's a lot of calculations that we put together to help substantiate these claims.

David Weiner (20:30): Yeah. My dad was a CPA and I've quoted him a lot of different times. But one of the things he taught me was to be a CPA in today's world, you've got to be about 10 miles wide and a foot deep. But you need to surround yourself with people who are a foot wide and 10 miles deep. That's kind of the role that we play with a lot of CPAs all over the country who work with these businesses and with real estate investors and all those kinds of things.

David Weiner (20:54): We're the specialist in certain areas that they can call on. We're going to take good care of their clients and we're going to help them look good in the eyes of their clients as well.

Brian Broussard (21:05): And we're not afraid to admit if we don't know something. One of my resources that we have is an ex IRS chief counsel. He was at the IRS for eighteen years, and he actually argued cases for the government on R and D. So there's some famous cases out there that he actually argued, but now he's on the private side. And so if I'm not sure about certain things or I feel like certain things are our gray area, I'll give him a call and I'll get his expertise on that too and get his thoughts because he's been on that side.

Brian Broussard (21:37): And he knows what they want to see. Yeah, it's a great resource that we have as well. I know what I

David Weiner (21:42): tell him, get I'm help. When I have questions, I come to you. When you have questions, you go to him. One way or another, we're gonna find the answer to all of that kind of stuff. So Exactly.

David Weiner (21:53): There's been a lot of noise over the last few years about R and D tax credits. From the perspective of a business owner or a CFO, not a tax lawyer, what does the current landscape look like for R and D credits and the way that R and D expenses are treated today?

Brian Broussard (22:06): Right. So to kind of put that in perspective and give you an idea of what it was a few years ago, going all the way back to 2017 with the Tax Cuts and Jobs Act, part of the way they showed how to pay for the tax cuts was they really played with the way R and D expenses were treated. So it was a ten year deal. The first five years R and D expenses were treated just like they have been since the 1980s, 100% deductible in the tax year they're identified, and you get to take a credit on top of that. That's where the benefit is.

Brian Broussard (22:35): In 'twenty two, you actually had to start amortizing those R and D expenses over five years. And since the government's on a fiscal year ending, you would deduct 10% of those R and D expenses for 2022 in that year, and the other $900,000 would amortize out. Well, if you didn't have other expenses to offset that $900,000 left in taxable income, that created a huge tax bill. And the kicker is this wasn't optional. This was law.

Brian Broussard (23:01): This was mandatory that you had to amortize 174 expenses. And same thing for 'twenty three and 'twenty four until the bill got repealed, till OBBBA repealed the requirement, and now we're all back to 100% expensing of the R and D expenses and taking the credits on top of that.

Unknown Speaker (23:19): So it's

Brian Broussard (23:20): become really beneficial again.

David Weiner (23:22): It should be staying that way, as far as we

Brian Broussard (23:24): It's can back to normal. But Congress is going to Congress sometimes. It should never happen to begin with.

David Weiner (23:32): I totally agree with that. Today's treatment of R and D costs, how does that change the after tax cost of innovation? In other words, I guess what I'm getting at is how much cheaper does it make it to hire engineers and developers and technical people to build or improve things since they're able to expense it the first year?

Brian Broussard (23:49): No, it's not really necessarily that it's cheaper. It's more beneficial for people to actually be hired on as W-two and do an R and D versus maybe outsource at $10.99. There is a different kind of calculation when we look at wages versus ten ninety nine people. When it comes to wages, they're weighted differently. If we have a $100,000 a year person that's R and D related and maybe 50% of their time is R and D, we get to take 50,000 of that towards the QREs, excuse me, qualified research expenditures.

Brian Broussard (24:21): But if you outsource it to a contractor for the same work, we only get to take 65% of those expenses towards the credit. So it's a little differently weighted when you're dealing with a W-two employee versus outsourcing the work to a ten ninety nine.

David Weiner (24:36): And I guess they would have to look at the difference in cost between a W-two and a ten ninety nine as well. Right. So if a company's never claimed R and D credits before, is there a realistic opportunity to go back and capture prior years?

Brian Broussard (24:52): Sure. So basically the R and D credit is subject to a three year statute of limitations. So we can go back three years and look at potential expenses and claim the credits. The process for amending returns for R and D versus timely filed is a little different. For timely filed returns, basically it really is just another form on the tax returns, 6,765 form that gets included in the tax return.

Brian Broussard (25:18): If it's a C corporation, then the credits stay with the C corp. And if it's a pass through, it flows through to the K-1s and then the shareholders or partners. And then we put the report together for a timely filed return. With amended returns, the process is a little bit different because they actually want documentation, kind of more substantiation upfront. And so we actually have to put a package together.

Brian Broussard (25:40): The IRS has actually laid out what they want to see. And while we don't have to do that on a timely filed return, for amended returns, do have to put a package together and it does go through a review to get paid out.

David Weiner (25:52): Okay. And I would assume that study would be a little more expensive.

Brian Broussard (25:55): Yeah, it's typically a little bit more for the mid years, but once we do it the first time, obviously we're done, we're doing it on a go forward basis and it truly becomes a timely filed yearly study.

David Weiner (26:06): Fantastic. Would they have to refile each year that they were looking at for the last three? If they were going back three years, would they have to refile each one of those?

Brian Broussard (26:14): They would. And there's certain things we wanna consider too when we're going back and amending returns for R and D. We have to figure in what our fee is. That's a cost, obviously. We also have clients that are maybe S corporations, again, or partnerships, and they might have 10 shareholders.

Brian Broussard (26:30): And if you have 10 shareholders and you amend that S corp for R and D, well, that gives you 10 new K-1s. And so then 10 people have to amend the return as well. You gotta figure in all that cost. We've actually talked with clients and advised them and said, Listen, the credits aren't large enough for you guys to amend because the cost of everything, including the amending, isn't really worth the time for you guys and worth the exposure. But if it's a one person firm or a couple of people and everyone's on board and credits make sense, then yeah, and the documentation is also key because they do look at it upfront, then yeah, we'll look at amending prior years and going back after those credits.

David Weiner (27:09): So let's give them some practical steps that they can take. If somebody's listening, whatever kind of company they're running and they think there may be some meat there as far as R and D tax credits, what are the first three steps you want them to take right away? Again, would it be contacting me, putting some documents together?

Brian Broussard (27:30): I think that the first step would be, obviously before you dive into it too much, is contact you and I. Let's have a discussion to see what's available, what's there. Because they may think they're doing R and D, and once I discuss it with them, they may realize they're not doing it. They may not meet the test. Or they may think that they've got a little bit of R and D here and there, and once we have additional discussion, there might be a lot more they're not even thinking about.

Brian Broussard (27:54): It's part of their everyday business. Call us. Let's talk about it. It doesn't cost you anything. Would just cost you fifteen, twenty minutes on the phone, let's just have some high level discussions on what they do.

David Weiner (28:07): And they can get both of us on a Zoom call whenever they need, even if they're just looking into it, get questions answered and that sort of thing, right?

Brian Broussard (28:14): Absolutely. I always tell people that whenever we're looking at an initial company to evaluate R and D, how many total employees do you have? And how many of those total employees are technical? Right? It could be anywhere from, you know, people that are in the job shop, CNC machinists, all the way up to software developers or engineers, or, or again, a pharmaceutical staff, doctors, things like that.

Brian Broussard (28:36): So if you've got probably at least five to six technical people at a minimum, then it's probably gonna be worth looking into a little bit further.

David Weiner (28:45): If I heard from somebody who's saying, We're growing and we've built internal software and improved processes for years, but we've never claimed R and D credits, Realistically, what kind of a timeline are we looking at and what kind of a process to evaluate prior years and start claiming going forward?

Brian Broussard (29:01): So I think that our process is a three phase process. The phase one is estimation. That's where we gather some high level information from these clients, tax returns, W-2s, job titles, things like that, and conduct a quick call just to talk to them about R and D, what the activities are. From there, I'd say within a week or two of getting the information, we can put together an estimate of what we think the credits are going to fall. And at that point, we can determine if it makes sense to move forward or not.

Brian Broussard (29:30): And not only current year, but if we want to look back in prior phase two is our qualitative and quantitative phase. That's where we dive down deeper into the actual projects themselves, as well as employee activities, shore up everything, make sure the documentation is correct, and ultimately finalize the credit forms and provide them to the CPAs and them to incorporate into their tax returns. And then phase three is the reporting. We put everything into a bound deliverable that really just tells a story. And it serves as the first line, defense if it's ever challenged.

Brian Broussard (29:57): With our study process, we also include audit defense if it's ever challenged in the future. So that is something that we provide. And we're gonna stick behind our work and stay with you, throughout the process.

David Weiner (30:07): Same as we do for cost segregation, right?

Unknown Speaker (30:09): That's right.

David Weiner (30:10): So we've already covered all of these, but I know there are myths out there, so I'm gonna throw out some statements. Again, you tell me true, false, or it depends. A quick explanation. Question number one, R and D tax credits are only for giant tech and pharma companies.

Unknown Speaker (30:25): Absolutely false.

David Weiner (30:28): How did I know you were gonna say that? Number two, if you don't have lab coats, patents, a formal R and D department, you can't claim the credit. Again, false. And third, if your CPA hasn't brought up R and D credits, you probably don't qualify.

Brian Broussard (30:43): That is false as well. It's funny you say that some CPAs are a little nervous to bring it up because they think that they didn't bring it up before. Listen, they have so much to worry about that there are so many CPAs they don't even think about R and D, and they may not be educated on what the four part test is. So it's not something to be embarrassed about. I've had CPAs say, I can't believe I didn't think about this in the past.

Brian Broussard (31:12): Now let's do it. Let's at least get it going forward and start saving these clients some tax dollars.

David Weiner (31:21): Last one, claiming R and D credits is basically asking for an audit. It's not worth the risk.

Brian Broussard (31:27): False. It used to be a tier one issue. I think that was in 2012 they dropped it. So the R and D credits, it's nothing to be scared of. Obviously, it's part of the tax code.

Brian Broussard (31:38): They want you to take it. Now, I'm not going to claim maybe a roofing company with a CFO at 100% R and D allocation. That's probably not going to pass the smell test. But if you think that you might be doing R and D, let's have a discussion. Let's vet it.

Brian Broussard (31:54): Let's see if that's the case.

Unknown Speaker (31:55): And if they don't qualify, we're not going to let them go forward anyway.

Brian Broussard (31:59): Yeah. I like to sleep at night. I don't like to play with the IRS. I like to stay in my lane and claim what we can substantiate and get the client some benefits. In addition to this, not only does the federal have a credit, but a lot of states have credits too.

Brian Broussard (32:17): So there's a way that you can kind of double benefit in most cases. California's got a great credit. I'm in Texas. Texas has got a pretty good credit now. They actually just increased it this year.

Brian Broussard (32:28): So a lot of states have credits as well.

David Weiner (32:31): That's good to know. That's great to know. And you know, I've done another episodes and written articles on the fact that tax preparation and tax strategy, two completely separate things. If you work with a tax professional that just does tax preparation, they're looking backwards. They're just filling out forms after you send them your p and l and your balance statement and filing your taxes, that's it.

David Weiner (32:56): Tax strategy is vital for people if they really wanna take advantage of the tax code. A tax strategist is gonna at least be familiar enough to look at all these things to bring it up and mention it and then hopefully send them our way. But this has been a great conversation. R and D just seems to be, you know, to a lot of people, smoke and mirrors, and they don't totally understand it. So I think we've accomplished what we set out to do.

David Weiner (33:23): We've talked about what an R and D tax credit actually is and isn't, who could realistically qualify, and how everyday problem solving could turn into meaningful recurring tax credits. That sounds good to me. We talked through real world examples, the kind of activities that qualify, the ones that don't, and what kind of documentation they're going to be looking for. So if you're listening and thinking, you know, we're constantly designing and fixing and improving things, but we've never even talked about R and D credits with our CPA. This is your sign.

David Weiner (33:55): Don't assume this doesn't apply to you just because you don't wear lab coats or run a tech startup. You might be quietly leaving 6 figures or more on the table every year. So to make your next step simple, again, I put together a free one page R and D tax credit playbook. It gives you a quick overview, some concrete examples of qualifying activities across different industries, talks about the four tests, the questions you need to ask so you can find out if your business is missing out on it. If you got value from this episode, do three quick things for me.

David Weiner (34:27): Number one, share this episode with one business owner, CEO, CFO, technical leader. No matter what business they're in, if they're always solving problems, you might be the reason they discovered a huge tax credit that they didn't know existed. Number two, subscribe to the Tax Strategy Playbook newsletter, get free resources, including my 2026 tax planning guide and my R and D playbook. Go to taxstrategyplaybook.com, sign up for the newsletter. Number three, subscribe to this tax strategy playbook on YouTube, Apple, or Spotify, so you don't miss future deep dives on powerful tax strategies and incentives.

David Weiner (35:05): And I think I'll add one more. If you didn't see last week's episode about one seventy nine D tax deductions, go back and watch that one right away. Cause I think that's really important. Again, Brian, thanks again for coming back and sharing your expertise. I really appreciate it.

David Weiner (35:19): I'm looking forward to seeing you in June.

Unknown Speaker (35:21): Thanks again, Dave. I appreciate it.

David Weiner (35:23): I'm David Weiner, Mr. Cash Flow. This is the tax strategy playbook where we turn the tax code into your competitive advantage. I'll see you on the next episode.

Brian Broussard (35:33): Thanks for listening to the tax strategy playbook. If you found today's strategies valuable, be sure to subscribe, leave a review, and share the show with someone who wants to play smarter with their money. You'll find more resources, tools, and expert tips at taxstrategyplaybook.com. After all, it's your money. Keep more of it.