Maximizing Tax Savings: R&D Credits, Entity Selection, and the Work Opportunity Credit, Ep #11

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What if you could save thousands on your taxes with a few strategic changes to your business? In this episode, Nick Romanelli and Dylan Valentyn from Clifton Larson Allen share key tax strategies that many manufacturers overlook.

We dive into the R&D tax credit, showing how manufacturers—whether small job shops or larger factories—can qualify by innovating in ways they may not have considered, such as improving products, developing new processes, or creating prototypes. By documenting these activities and tracking time and materials, manufacturers can unlock valuable credits that could significantly boost their bottom line.

We also explore the impact of the Section 174 rules, which now require manufacturers to capitalize and amortize research expenses over several years rather than expensing them immediately. While this change can affect cash flow, the R&D tax credit offers relief by providing a dollar-for-dollar reduction in tax liability. Nick and Dylan explain how to navigate these changes and ensure manufacturers are maximizing their R&D claims.

Next, we discuss the critical decision of entity selection—LLC, S Corp, or C Corp. Nick and Dylan break down the advantages and disadvantages of each structure, and how making the right choice can lower your tax burden, attract investment, and set up your business for long-term success.

Finally, we introduce the Work Opportunity Tax Credit (WOTC), a valuable but often overlooked tax benefit for manufacturers who hire employees from groups facing employment barriers, such as veterans or long-term unemployed individuals.

Tune in to discover how these tax strategies can save you money and help your manufacturing business thrive, plus a look at what tax changes to watch for in 2025.

You will want to hear this episode if you are interested in…

• (0:00) Introduction to the episode and the guests
• (0:59) Depreciation strategies for IT and power infrastructure
• (02:25) The overlooked opportunity of R&D tax credits
• (04:34) Tracking R&D activities for tax credit qualification
• (10:32) The process for claiming R&D credits
• (13:51) The impact of the 174 rules on research expenses
• (17:10) Tax strategy for manufacturers considering entity selection
• (21:16) Exploring the Work Opportunity Credit
• (24:18) Tax changes to watch for in 2025

Resources & People Mentioned

• CliftonLarsonAllen (CLA)
• Glossary of Terms

Connect with Dylan Valentyn and Nick Romanelli

• Connect with Dylan on LinkedIn
• Connect with Nick on LinkedIn

Connect With Buy the Numbers

• Follow on LinkedIn
• Connect with Mike Payne on LinkedIn

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Audio Production and Show Notes by – PODCAST FAST TRACK