Three-stage inventory tracking, equipment depreciation, and R&D tax credit review for small manufacturers.
Manufacturing runs on raw materials, work-in-progress, and finished goods inventory that all need to be valued and tracked correctly, alongside equipment purchases that represent some of the largest capital investments a small business makes. Hasco Tax Advisors works with small manufacturers on inventory costing, equipment depreciation, and the specific deductions available for domestic production.
Manufacturing inventory exists in three distinct stages, raw materials, work-in-progress, and finished goods, and each needs to be valued correctly at year-end. Lumping all inventory into one number, rather than tracking it by stage, makes it difficult to see where cost overruns are actually happening in your production process.
Manufacturing equipment represents significant capital investment, and Section 179 combined with bonus depreciation allows much of that cost to be deducted in the year of purchase rather than spread over years. Timing major equipment purchases relative to your profitable years matters for cash tax planning.
Correctly separating direct costs (materials and labor tied to a specific product) from overhead (facility costs, equipment depreciation, indirect labor) is essential for accurate product costing and pricing decisions, not just for tax purposes.
Many manufacturers qualify for the R&D tax credit without realizing it, developing a new product, improving a manufacturing process, or engineering a solution to a production problem can all potentially qualify, and this credit is significantly under-claimed in this industry.
Raw materials, work-in-progress, and finished goods valued and tracked separately, giving you real visibility into production costs.
Manufacturing equipment tracked and depreciated correctly, coordinated with Section 179 planning for major purchases.
Direct costs separated from overhead so you know the true cost, and true margin, of each product you produce.
Product and process development activities reviewed for R&D tax credit eligibility, an opportunity most manufacturers miss.
Three-stage inventory tracking and cost accounting that shows you exactly where your margin is actually coming from.