Accounting firms that grow do so by offering high-value services to increase revenue and improve margins. 

Typically, the more specialized the service, the higher the value. Two of those high-value services to consider offering your clients are R&D Tax Credit and Cost Segregation.

A Brief Explanation of the R&D Tax Credit and Cost Segregation

R&D Tax Credit

The R&D tax credit was developed to incentivize research and development. The reduced tax burden encourages companies to invest in R&D, which promotes innovation and creates high-paying, technical jobs. 

But what you (and your clients) may not know is that a dedicated R&D department isn’t a prerequisite for claiming these credits. The client must simply be able to prove that the activity’s purpose is to solve a technical uncertainty. This proof must rely on hard sciences and employ stringent testing procedures.

To prove the R&D cost qualifies, the activity must pass the IRS’s 4-part test for qualifying business activity.

Although there are a few exclusions, any size or type of company can qualify.

Furthermore, where some deductions merely decrease the amount of taxable income, the R&D tax credit reduces tax liability directly, significantly improving your client’s cash flow.

Cost Segregation

Cost segregation is another strategy for improving a business’s cash flow via reduced tax liability. It works by accelerating the depreciation of commercial building costs. 

How does a cost segregation study work? It’s an in-depth engineering analysis of the depreciating value of long-term fixed assets. It could apply to:

  • Newly constructed buildings
  • Recent property acquisitions 
  • Renovations

By moving components of the property from “long tax-life” categories to “short tax-life” categories, building owners can write off the building in the shortest time permissible under current tax laws.

It’s important to note, however, that the IRS guidelines here are relatively strict.

Benefits of Adding R&D Tax Credit and Cost Segregation to Your Roster

Growth & Business Development

These tax-reducing tools will be applicable to most of your clients. Adding them has the potential to greatly increase your firm’s revenue while providing your clients with a huge value-add in the form of cash flow improvement. 

Simply put, adding these services to your offerings presents a huge growth opportunity for your firm.

Use a Partner

If you’re not experienced with these specialty topics, and not interested in developing this expertise on your team, why not partner with an expert? 

Choose a partner and work with them as an extension of your own firm. Choose a partner with fair fees, who saves you from playing the audit game. Choose a partner who’s fully dependable and fully documented. 

Offering these services through a partner means minimal extra effort on your end, with no downside for your firm.

Create Efficiencies

When you go the partner route, adding these services won’t affect your bandwidth or your team’s capacity. You can improve your margins without expanding your team. 

Because offering these services doesn’t mean hiring additional staff, your firm’s efficiency will improve by generating additional margins without expanding your client base or capacity. 

Reinforce Your Role as a Trusted Advisor

Higher-value services tend to attract higher-value clientele. Adding R&D Tax Credits and Cost Segregation Studies will reinforce your position as an expert. And of course, your clients will appreciate the additional service and reduced tax bill. 

Help Businesses Navigate the Current Economy

Over the past year, CPAs have done some of their most important work ever. In dynamic times, there are many opportunities to succeed by helping your clients succeed. 

The days of only doing the books and filing client tax returns are gone. Modern CPAs are adding more and more value to their client companies. 

In addition to traditional tax and audit services, a high-value CPA firm now offers a variety of services ranging from strategic tax planning to fulfilling a fractional CFO role. These CPAs are focused on becoming true financial partners to their clients. 

Tailoring your service offerings to your clients’ needs lets you add more value.

R&D Tax Credits and Cost Segregation Studies are great services to offer clients to reduce their tax liability and improve their cash flow. Helping companies keep more of their earnings and stay open is a valuable service both to the individual client and to the overall economy. 

Check out our 8-Point Checklist, designed to help you confidently select the right R&D Tax Credit partner.


We understand what it’s like for CPAs to question whether they have selected the right specialty tax partner. The right partner will have proven expertise and serve to enhance the relationship between client and CPA. This is why Tri-Merit serves as an extension of the CPA’s advisory team to reinforce the CPA’s role as a trusted advisor, while helping taxpayers increase cash flow through specialty tax incentives. 

Schedule a discovery call at 800.624.1076 to give your clients the best possible experience with a partner you can trust.

R&D tax credit | Cost segregation | 179D | 45L | Employee Retention Credit