As a startup, there are countless lessons we’ve learned‌. In a sea of missteps and failures, the Neo.Tax team has grown. Making it even more exciting when we can pass some of what we’ve learned to those who might need a few tips and tricks.

As many stories now begin, this month our Startup Tip started with a text.

A friend and fellow founder reached out to Neo.Tax co-founder, Firas Abuzaid, wanting a little advice on how to handle company expenses come tax time.

The Question:

How should our company handle the accounting for expenses like meals and gas that we charge to a company card?

The Tip:

To future-proof your company for tax time, make all your company purchases using a company card that allows for integration with your tax and accounting software.

You can sync your expenses yourself or outsource your bookkeeping. Though hiring a bookkeeper or a fractional CRO shop like AbstractOps or OpStart comes at a cost. More than likely you won’t need to outsource until you’ve raised a seed round or have more capital.

The Recap:

• Sign up for a company card
• Sign up for an accounting/bookkeeping software, like Xero or QuickBooks.
• Sync your company card with your accounting software.
• Use the card as much as possible for all company expenses.
• Use quick classifications like “Meals & Entertainment” for company dinners.

Share this tip with someone who might need it, or keep it for yourself. Do you have a tip for Startups? Continue the conversation in the comments.

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Indiana Lawmaker Spearheads R&D Tax Credit Increase

By Neo.Tax Team

2 minute read

With backing from the National Association of Manufacturers, GOP Representative Jackie Walorski of Indiana put forward an amendment to the tax code that could mean serious increases in research and development tax credits for businesses.

Over the years, the R&D Tax Credit has gone through many changes. In 2015, the credit became permanent thanks to the PATH Act. The act also expanded R&D tax credit access to small and medium businesses, as well as startups.

Currently, Rep. Walorski is proposing H.R. 8253, better known as the FIRST Act or the Fostering Innovation and Research to Strengthen Tomorrow Act. This amendment would increase the amount of R&D spending that businesses can claim.

Double the credit, double the fun… that should be Rep. Walorski’s slogan.

Here are all the proposed changes:

• Doubling the traditional limit of $250,000 to $500,000 for startups.
• Increasing the traditional rate from 20% to 40% of the increase in R&D spending for existing businesses.
• Increasing the Alternative Simplified Credit from 14% to 28% of an increase in company R&D spending.
• Doubling the credit from 7% to 14% of R&D spending for companies with no history of research within the past 3 years.

“Doubling the R&D tax credit will encourage American companies — especially small businesses and startups — to invest in innovation that will unleash economic growth and prosperity,” Walorski said in response to the proposed changes. He further affirmed, “the FIRST Act will take a strategic step toward ensuring that America will lead the world in scientific discoveries, technological breakthroughs, and cutting-edge manufacturing for the 21st century.”

The proposed amendment has strong backing from the National Association of Manufacturers, as acknowledged by their senior director of tax policy, David Eiselberg, “the manufacturing industry is the backbone of American research and development, and this bill would support jobs, boost innovation and help ensure America’s future competitiveness.”

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