As software and technology companies continue to grow and evolve, so does their need for sound business advice. The Technology Industry Group at Anchin is uniquely qualified to serve the diverse needs of early stage, growing and established technology companies. For more than 90 years we have been advising businesses on topics that matter most to them – such as maximizing stockholder value, realizing their financial vision, and organizing the company in the most efficient and advantageous ways for future growth.
By keeping clients abreast of new developments and industry trends, Anchin’s experts provide the practical solutions companies need to keep growing in a highly competitive market. The Technology Industry Group helps companies throughout their lifecycle obtain access to capital and financing, consider the most effective tax and equity structure of the company, and provide due diligence for merger and acquisition opportunities. Our experts assist companies in developing key employee retention strategies, perform valuation analysis, and help management understand and execute complex revenue recognition practices. In addition, Anchin also provides clients a seamless approach in generating and utilizing tax credits and incentives, including research and development tax credits, and other state and local incentives.
Anchin’s Technology Industry Group recognizes that all of these strategies are utilized as part of each client’s unique blueprint for growth and profitability.
- Accounting issues and tax consulting
- Revenue recognition
- Intellectual property and other intangibles
- Equity based compensation
- Website and software development costs
- Tax credits and incentives
- Research and development tax credits
- Section 199 deductions
- Section 382 NOL analysis
- Multi-state tax analysis and issues
- International taxation
- Transfer pricing
- Employee benefit plan considerations
- Business advisory services
- Venture capital and private equity financing
- Organization structure and exit strategies
- Mergers and acquisitions
- Transaction Advisory Services - Due Diligence
- Implementing effective business plans
- Compensation structures for key employees
- Cash flow projections and modeling
- Facilitation of bank financing
- Overhead cost reduction
- Financial system selection
- Business valuations
- Estate planning
- Succession planning
- Recruitment of financial personnel
Research and Development
The United States has the most advanced software and information technology industry in the world. The U.S. software and IT industry has increased its revenue to more than $600 billion in recent years, representing 25% of the global marketplace. Products and services from the technology space have efficiently transformed the way most organizations communicate, coordinate, and operate. There are more than 100,000 technology services companies in the U.S., a staggering 99% of which have fewer than 500 employees. On the other side of the spectrum, a list of the world’s largest software development firms by revenue is dominated by U.S. companies which hold eight of the top ten spots.
Due to the rapid adoption and expansion of internet technologies over the past decade, the software and technology industry has undergone significant structural change, most notably a shift from commercial product release toward customized software related services. The most evident example of this is the evolution of cloud computing, mobile or wireless technologies and the “Internet of Things”. Research and Development (R&D) tax credits are available to all technology businesses that produce or develop new or improved products, processes, principles or methodologies.
Anchin’s professionals understand the important role the technology industry plays in keeping the U.S. competitive in an increasingly global economy. Our industry experience, attention to detail and expert judgment result in accurate, highly defendable tax credit calculations. Our dedicated team includes audit, tax and advisory professionals with years of experience identifying issues and solving problems for technology industry companies in the following areas:
- Application software publishers
- System software publishers
- Custom computer programming services
- Middleware, tools and integration software/services
- Information, communication and cyber security services
- Cloud computing, wireless and mobile platforms development
Our technology industry R&D team ensures that our clients benefit from all of the incentives available to them. Anchin helps clients assess their R&D tax credits at all phases of their business, from the time they first consider a new product, service or functionality (white space evaluation) and throughout the entire product development lifecycle. We are particularly skilled and experienced at identifying qualifying projects and initiatives in each area of your business and are experts at examining and capturing all allowable expenses towards your company’s research credit.
- R&D Tax Credits Case Studies: Technology
The following are two examples of client development efforts in the software and IT industry which further illustrate the types of projects and activities that
- Avoiding Double Taxation from Selling a C-Corp – Not Easy but PossibleOctober 15, 2018
When the owner of a C-Corporation sells their business for a profit, the profits will be taxed twice: once at the corporate level and again when money is distributed to the owner/shareholders as a dividend. However, in some circumstances there may be a way to avoid the double taxation. It’s a difficult strategy to pull off but could be possible under the right conditions.
- Finally Some Digestible Meal and Entertainment GuidanceOctober 3, 2018
On October 3rd, the Internal Revenue Service released Notice 2018-76 providing transitional guidance on how the Tax Cuts & Jobs Act changes to the deductibility of Entertainment expense affects the 50% deductibility of business Meals that taxpayers and professionals had been hungering for. While the guidance is transitional, it provides clarity on some of the issues we had previously provided comments on:
- Impact of the Recent Tax Reform on the Private Equity IndustryMay 15, 2018
The Tax Cuts and Jobs Act (the “Tax Act”), which was signed into law on December 22, enacted a broad range of changes with most provisions taking effect for tax years beginning after December 31, 2017. This alert summarizes some of the key (federal) tax provisions of the Tax Act affecting the private equity industry.
- New Tax Law Provides Potential Deferral Opportunity for Equity Compensation Granted by Privately Held CompaniesMarch 9, 2018
The recently passed Tax Cuts and Jobs Act has attempted to cure a common problem that employees of privately held companies encounter when certain types of equity compensation convert and become income.
- Tax Cuts and Jobs Act Substantially Limits Meals and Entertainment DeductionFebruary 14, 2018
The 2017 Tax Cuts and Jobs Act introduced some significant limitations to the meals and entertainment deduction. The new law makes two major changes to the meals and entertainment rules, which can impact your business.
- Tax Bill Impacts Service FirmsDecember 28, 2017
On December 22, President Trump signed into law the “Tax Cuts and Jobs Act of 2017” (TCJA). The bill contains many provisions effective in 2018 that will significantly impact professional and non-professional firms.
- Tax Cuts and Jobs Act Offers Favorable Tax Breaks for BusinessesDecember 28, 2017
The Tax Cuts and Jobs Act (TCJA), which was signed into law on December 22, contains a treasure trove of tax breaks for businesses. Overall, most companies and business owners will come out ahead under the new tax law, but there are a number of tax breaks that were eliminated or reduced to make room for other beneficial revisions. Here are the most important changes in the new law that will affect businesses and their owners.
- The Tax Cuts and Jobs Act Doesn’t Cut the R&D Tax CreditDecember 27, 2017
On December 22nd, President Trump signed the Tax Cuts and Jobs Act of 2017 (“TCJA”) into law, setting the stage for the most sweeping update to the U.S. tax code since 1986 tax reform enacted under President Reagan. The centerpiece of the TCJA, is a permanent reduction in the corporate tax rate from approximately 35% to 21%. Thankfully, as expected, the final law has preserved the research and development (“R&D”) tax credit, which was made permanent in the Protecting Americans against Tax Hikes (“PATH”) Act of 2015.
- Congress passes biggest tax bill since 1986December 21, 2017
On December 20, the House passed the reconciled tax reform bill, commonly called the “Tax Cuts and Jobs Act of 2017” (TCJA), which the Senate had passed the previous day. It’s the most sweeping tax legislation since the Tax Reform Act of 1986. The bill makes small reductions to income tax rates for most individual tax brackets, significantly reduces the income tax rate for corporations and eliminates the corporate alternative minimum tax (AMT).
- Taxes for LLC vs. C-Corp: Which is more beneficial for a Technology Company?December 14, 2017
When making the decision about the type of entity you will choose for your business, there are many factors that need to be considered. Whether it is legal structure and liability, current and future tax implications, set up and compliance costs, or flexibility and exit strategy, there are a variety of elements which will help guide the decision.
- Tax Reform Proposals Affect Partnerships and S CorpsNovember 16, 2017
On November 9, 2017 the Senate Republicans released their version of tax reform. The Senate version has similarities to the House’s proposal, but there are some distinct differences, including the relief for small businesses.
- Compare and Contrast the House and Senate Tax BillsNovember 14, 2017
Many of the House and Senate provisions are similar. For example, both plans would repeal the alternative minimum tax and retain the charitable contribution deduction. However, there are a number of key differences. Here’s a look at some of the most significant.
- Senate GOP Releases Tax Reform PlanNovember 14, 2017
The Senate released its long awaited tax reform proposal. While many similarities exist with the House bill many differences also exist. Here are a few observations.
- Techweek Recap: How to Successfully Execute Mergers & AcquisitionsNovember 10, 2017
Anchin recently sponsored Techweek New York, a week-long conference which exists to spread wealth creation to a diversity of places and people through supporting the emergence of substantial and sustainable businesses, which they call Hero Companies.
- U.S. Research and Development Tax CreditOctober 30, 2017
Yair Holtzman, Leader of Anchin's Research and Development Tax Credits Group, explains how the credit works and shares his findings on the impact of the PATH Act.
- Year-End Tax Planning for Businesses: Looming Tax Reform Creates Planning ChallengesOctober 30, 2017
As the end of 2017 approaches, the prospect of dramatic tax reform makes year-end tax planning especially challenging. In late September, the Trump administration and Republican congressional leaders unveiled their Unified Framework for Fixing Our Broken Tax Code. The framework proposes reduced tax rates for businesses as well as changes to a variety of business tax benefits. But there’s a great deal of uncertainty over when — and if — tax reform will be implemented and which proposals could make their way into possible new tax legislation.
- Venture-Backed Activity Grows in 2017, but So Does the Average Investment LifeSeptember 26, 2017
While 2016 saw somewhat of a correction in Venture Capital activity from the highs of 2014-2015, 2017 has begun a rebound and is on pace to top 2016. However, data has shown a growing disparity between the number of VC investments and the number of exits by venture-backed companies, indicating that late-stage companies have increasingly chosen to continue raising capital rather than move forward with an exit.
- New Jersey Angel Investor Tax CreditMay 24, 2017
New Jersey has amended and expanded the rules for claiming the Angel Investor Tax Credit. The Angel Investor Tax Credit provides for a tax credit equal to ten percent (10%) of the qualified investment made by a taxpayer in a New Jersey emerging technology business.
- Trusting Leadership: Member Spotlight with Christopher NobleMarch 7, 2017
Technology Practice Leader Christopher Noble featured in a member spotlight by Thuzio Executive Club
- Balancing risk and reward: A roundtable discussion on fast growthJuly 1, 2016
Anchin Technology Practice Leader, Christopher Noble, shares his best strategies for managing technology change, attracting A players and bringing outside financing to the table.
- Managing growth: Growing a business from startup to finishSeptember 1, 2015
SmartCEO and Anchin Technology Practice Leader Christopher Noble gathered alumni of the Future 50 program which honors up-and-coming, fast-growth companies, to look back on past challenges and share future plans.
- Proposed Regulations Provide Clarity and Guidance Related to Computer Software as it Applies to the R&D Tax CreditJanuary 26, 2015
On January 16, the Treasury and IRS released proposed regulations (REG-153656-03) regarding internal use software ("IUS") expenditures as related to the Section 41 Research & Development ("R&D") tax credit. The proposed regulations contain several important changes related to claiming the R&D tax credit for IUS expenditures.
- How Does Tax Reform Impact You?
Examining Home Mortgage Interest and Home Equity Loan Interest Deductibility under the TCJA11/30/2018 Opportunity Zone Proposed Regulations Issued: What Was Answered10/22/2018 Finally Some Digestible Meal and Entertainment
- A Tactical Approach to R&D Tax Credits for Defense ContractorsNovember 12, 2018
The purpose of this article is to help private military defense contractors obtain a better understanding of the federal R&D tax credit and how it may help enable military defense innovations. This article also explores recent defense innovations for land, air, sea, cyberspace, and outer space threats and how the federal R&D tax credit incentive offered may be able to save a business money when developing these solutions.
- Software Development and the Research CreditMarch 1, 2017
This article discusses the definition, workings, recent history / developments, and calculation methodologies for the R&D tax credit. It then offers specific examples of qualifying
- The Research and Experimentation Tax Credit: A Credit Fraught with Uncertainty and in a Process of ExperimentationJanuary 1, 2011
Abstract Purpose – The purpose of this paper is fourfold: to provide an overview of the alternative simplified credit (ASC) and a basic understanding of how
- Utilizing Innovation and Strategic Research and Development to Catalyze Efficient and Effective New Product DevelopmentJanuary 1, 2010
Introduction The ability to effectively innovate and develop new products is a vital core competency that any company must possess if it is going to be
- Anchin Webinar: Tax Reform Discussion - How will the Bill Affect You? Get the Answers; Not Just the FactsJanuary 12, 2018
In this recorded webinar, Anchin assembled a panel of top professionals from varying viewpoints, including Real Estate, Financial Services, Professional Services, Technology, and Private Client to have a Q&A session on the effects of the new tax reform.