Today we’d like to introduce you to Stephen Tsai
Hi Stephen, please kick things off for us with an introduction to yourself and your story.
Tax Credit Hero began as an idea to build software to automate the R&D tax credit claiming process for companies. Just a brief overview, the research and development (“R&D”) tax credit is claimed on a company’s federal tax return. Companies primarily use this credit to reduce their income taxes dollar for dollar. Many early-stage companies that may not owe any income tax can apply their R&D tax credit to reduce future payroll taxes, again dollar for dollar. And given the IRS’ broad definition of what qualifies as R&D, lots of companies in nearly all industries can qualify for this tax benefit. Believe it or not, this tax credit has been around since the 80’s. Yet, many companies do not claim it or think they don’t qualify for it. In the summer of 2018, I was accepted into an accelerator program at Rice University, OwlSpark, with the intent of building technology that could help facilitate clients claiming the R&D tax credit. During this time, I began networking with many startup companies around Houston to see if they would be interested in such a product.
What I discovered was, 1) Many of these startups heard of the R&D tax credit but did not pay much attention because they thought they could not monetize it as they did not owe any income tax, 2) these same startups were excited about the opportunity to reduce future payroll taxes, and 3) while these companies liked the idea of a “do it yourself” solution, similar to Turbo Tax, they still needed the expertise and consultation of someone who is knowledgeable about the tax code and tax laws as it pertains to the R&D tax credit. That leads up to where we are today. We’ve inadvertently built a successful consulting company helping businesses go after the R&D tax credit. That is not to say we have stopped our software efforts — the opposite in fact. We’ve used a portion of the revenue we’ve earned to build software and tools that help make claiming the R&D tax credit easier. We’ve dedicated Tax Credit Hero to be a software-only company. Meanwhile, we have moved our consulting clientele over to our sister company, Probity Tax Recovery, which focuses on tax consulting.
Would you say it’s been a smooth road, and if not, what are some of the biggest challenges you’ve faced along the way?
We are grateful for what we have and what we have achieved. But the road was not always smooth. By far, the most challenging struggle was finding the right people and team that are motivated and can understand and execute the vision you’ve set out. Ultimately, this is the tax business, quite possibly the most uncool business you can be in. Still, there is an opportunity in this industry that we plan to capitalize on.
As you know, we’re big fans of Tax Credit Hero // Probity Tax Recovery. For our readers who might not be as familiar, what can you tell them about the brand?
We help businesses identify, maximize, and monetize their R&D tax credit. Our three partners collectively have over 30 years of experience focused solely on assisting businesses to go after this tax benefit. We run a lean operation, so our fees are the most competitive in the industry. Let’s chat to see how we can help your organization!
Alright, so to wrap up, is there anything else you’d like to share with us?
The pandemic has affected many people and organizations. And we at Tax Credit Hero and Probity Tax Recovery hope the impact to you has been minimal. Thankfully, the government was quick to provide some relief through the CARES act. While the EIDL and PPP loans have been helpful, don’t forget to look at the R&D tax credit for additional relief, which can be calculated alongside the CARES Act Employee Retention Credit for a huge boost in 2020 for companies who are eligible. Please stay safe and healthy out there!
Contact Info:
- Email: stephen@probitytaxrecovery.com, stephen@taxcredithero.com
- Website: taxcredithero.com and probitytaxrecovery.com
- Other: https://www.linkedin.com/company/tax-credit-hero/ and https://www.linkedin.com/company/probity-tax-recovery/
