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****** Scenario 1: R&D Tax Credit (Research & Development) A...

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Accounting

******
Scenario 1: R&D Tax Credit (Research & Development)
A technology company incurs the following qualified research expenses:
Wages: $400,000
Supplies: $80,000
Contract Research: $150,000
Current year gross receipts: $2,000,000
Base period gross receipts (prior 3 years) average: $500,000
Interest & Dividend Income: $1,000
Itemized Deductions: $12,000
Allowable deduction for self-employment tax: None (all employees, no self-employment income)
Calculate:
The potential R&D tax credit (consider regular and simplified methods)
Impact on AGI, Taxable Income, and Total Tax Liability

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