Domestic Production Deduction
Opportunity: If you are engaged in domestic production activities, you may be entitled to an additional federal tax deduction amounting to 9% of your net income.
Implementation: These determinations can be simple or complex. ThreeFive works directly with you to determine if you have, “qualified production activities”. ThreeFive will help you decide if an IRS-recommended statistical sample is necessary.
The key is determining if you are performing any of these qualifying activities in the United States:
a) Construction of, engineering or architectural services for real property.
b) Lease, rental, license, sale, exchange, or other disposition (manufacture, produce, grow, extract, install, develop, improve, or create) of any of the following:
i) Tangible personal property;
ii) Computer software;
iii) Sound recordings or film, or
iv) Electricity, natural gas, or potable water.
Result: 9% of the net income from qualifying activities could be an additional deductible expense. Our fee is based on the tax benefit of the deductible expense.