Some say that comparison is the thief of joy.

But in business, that might not be entirely fair. While maintaining your vision of where the firm is going is critical, it’s also important to keep an eye on the competition.

In the tax community, people often wonder what other firms are doing. The comparison is especially attractive when looking at similar firms with similar clients. Firm management is always wondering how they stack up.

Knowing what other firms are offering can be extremely valuable for practice management and strategy when it comes to your own firm’s service offering — especially of specialty tax services.

How does your firm measure up?

Tri-Merit’s Benchmarking Survey

During summer 2021, Tri-Merit surveyed over 100 clients of different sizes to gauge how those clients incorporate R&D tax and other specialty tax services. One of the questions asked participants which specialty tax services firms considered a part of their “regular” offering.

Tri-Merit’s survey focused mainly on the specialty services that we offer. There are many specialty tax topics that Tri-Merit doesn’t get involved in, and those weren’t part of the survey. So because Tri-Merit mainly focuses on more technical, engineering-based topics, that was the focus of the survey.

What do you think? What types of firms offer which specialty tax services?

Specialty Tax Services

Some of the responding firms already offer specialty tax services as part of their standard portfolio. They listed the following as part of their regular offerings:

Further, nearly 40% of respondents told us that they don’t typically offer any assistance related to the common credits above. These participants were most likely from a smaller firm.

Smaller Firms

Around two-thirds of the survey participants reported working at smaller firms (less than 25 employees). Of those, nearly half of them are sole practitioners.

Sole practitioners are the most likely group to offer their clients none of the above services.

For smaller firms and sole practitioners with many business clients, offering these specialty tax services could be a big opportunity. However, carving out the capacity to engage an expert partner like Tri-Merit could be a challenge, depending on their current workload.

On the other hand, offering these services could save their clients money.

Mid-Sized Firms

Although mid-sized firms represented the smallest group of participants (only about one-eighth of them), they were the most likely to offer cost segregation studies and R&D accounting services.

Again, there is also ample opportunity here.

Midsized firms are likely already working with contractors or partnering with specialists. Thus, it’s not a huge stretch to begin offering specialty tax services. It might also be an opportunity for a few high-performers in the firm to collaborate with a partner firm to expand their offerings.

Large Firms

These firms with over 50 employees were most likely to offer ERC and Section 179D tax credit services.

As a reminder, Section 179D is an energy efficiency credit allowing building owners to deduct up to $1.80 per square foot for new and upgraded buildings meeting certain efficiency criteria. There are also provisions of energy efficiency tax deductions for improvements in lighting, building envelope, and HVAC/Hot Water systems.

This credit was made permanent in 2021as part of the COVID bill.

Major Opportunity for CPAs and Clients

Specialty tax services like the ERC and R&D tax credits represent a considerable opportunity for CPAs and their clients. Although the five credits listed in this article are very engineering tax services-based, there are others as well.

But if your firm isn’t offering these services yet – why not?

When partnering with qualified experts, the firm has minimal downside potential. You get the chance to expand your offerings without the hassle and expense of hiring or developing the knowledge base. Then, you can give clients additional services and save your clients money.

Tri-Merit can be that expert. We give our partners and their clients a straightforward experience, no matter how complex the topic is.

If you have clients that you think could benefit from these tax credits, schedule a discovery call today with our team of specialty tax experts.