Although tax credit software offers automation, many employers miss out on value without strategic guidance. As a result, more companies are moving from tax credit software to managed services.
Changing from tax credit software to managed services enables companies to optimize tax credits and increase the value received. Gaining actionable insights and strategic business collaboration strengthens business growth.
Tax Credit Optimization
Tax credit software offers highly replicable functions that rarely differ between companies. However, because different companies qualify for various tax credits, a customized approach is needed to maximize savings.
Conversely, managed service partners tailor their approach to tax credit application and management, ensuring each company optimizes applicable tax breaks. Maximizing tax savings strengthens business operations, revenue, and the bottom line.
Value Creation
Most tax software focuses on traditional tax credits. A lack of identifying new tax credits limits savings, value, and growth opportunities.
In contrast, finding additional tax credits provides further opportunities to reduce the company’s tax burden:
- Tax savings increase funding for training, research, and development.
- Companies can modify their offerings or provide additional products and services to meet market demand.
- Increasing market share strengthens the company’s competitive edge.
Actionable Insights
Outdated software does not search for the latest tax credits:
- Failure to claim tax credits causes the company to pay higher taxes than necessary, directly impacting net income.
- Lost funds could have been reinvested in the business.
- Missing out on tax credits designed to foster growth and investment impacts a company’s financial performance and long-term viability.
Alternatively, managed services uncover all applicable tax credits for a company, including the following:
- Research and development tax credits: Many small and medium businesses qualify but do not understand how to navigate the application process.
- Payroll tax credits: Many companies qualify but do not apply for the Work Opportunity Tax Credit (WOTC) due to a lack of awareness, complex regulations, or inconsistent documentation.
- Startup tax credits: Small employers starting retirement plans for employees often miss out on specific tax credits designed to incentivize such plans.
Strategic Business Collaboration
Software executes specific tasks that provide limited services. A lack of strategic involvement means tax credits are typically missed, reducing revenue and opportunities for business growth.
In contrast, a managed services partner ensures companies take advantage of every applicable tax credit to optimize savings. Reinvesting the funds in the business supports upskilling, innovation, and expansion.
Partner with a Top Tax Managed Services Provider
MJA & Associates uses the latest technology and over 20 years of experience to help companies optimize tax credit savings. Contact us to learn more today.
