Don’t leave money on the table: 3 tax opportunities that often get missed
- Businesses rarely miss tax opportunities because they aren’t eligible — they miss them because they don’t know opportunities exist or don’t identify them in time.
- When tax planning follows growth decisions, you can lose savings opportunities tied to timing, elections and structure.
- Research and development credits, capital investment incentives and state tax exposure are among the most overlooked tax savings. Each can materially affect cash flow and risk.
- Advisors need visibility into operational decisions throughout the year to help businesses capture available savings, reduce risk and keep more of what they earn.
Most businesses don’t leave money on the table intentionally. They do it because tax considerations often trail day-to-day decisions about growth. By the time tax advisors are brought in, decisions with tax implications have already been made, and valuable planning opportunities may have passed.
When tax is treated purely as a year-end compliance exercise, savings opportunities often go unrealized. A more proactive approach can change that dynamic. Aligning tax planning with operational decisions throughout the year can help uncover meaningful savings, improve cash flow and reduce risk.
With that in mind, leaders should revisit three commonly overlooked areas to make sure they’re not missing opportunities — and leaving money on the table.
Are you leaving money on the table?
1. Are you overlooking R&D tax credits?
It’s a common misconception that research and development (R&D) tax credits only apply to work done in formal research facilities — think lab coats and beakers. In reality, the R&D credit is much broader.
R&D tax credits can apply to activities related to developing or improving products, processes, techniques or software — particularly when teams are working through technical uncertainty or relying on principles of engineering, chemistry, biology or computer science to solve a problem.
In manufacturing, construction and engineering, qualifying activities may look less obvious: automating manual processes, developing or refining production techniques, testing new materials or figuring out how to perform work under challenging physical conditions. Even when the end result isn’t a new product, the effort to solve a technical problem may still qualify.
So why do so many businesses leave the credit on the table? In many cases, they simply don’t realize their work applies. Documentation is another deciding factor. The tax code doesn’t provide a precise checklist for claiming R&D credits, which makes the process feel subjective. However, records are critical. Understanding who is involved, how much time is spent on qualifying activities, what alternatives were considered, and how technical challenges were addressed can mean the difference between a defensible credit and one that’s difficult to support. While eligibility isn’t based on a checklist, substantiation must clearly demonstrate technical uncertainty, process of experimentation and qualified activities.
For many businesses, the R&D tax credit opportunity isn’t about doing new work. It’s about recognizing, documenting and planning for work they’re already doing.
2. Are you timing capital investments for maximum benefit?
When it comes to capital investments, many companies focus on what they’re buying, while overlooking when and how those assets are placed in service. That timing, along with the elections made around it, can significantly impact cash flow.
Recent changes to the tax law have reinforced that reality. The permanent restoration of 100% bonus depreciation means businesses may be able to fully expense qualifying property in the year it’s placed in service, rather than recovering costs over time. While many leaders are familiar with bonus depreciation in general, the details matter. Acquisition timing, binding contracts, the component election for self-constructed property and placed-in-service rules can all influence whether an asset qualifies — and when deductions can be taken.
Another commonly missed opportunity is cost segregation, particularly for buildings and facility improvements. By separating components of a structure into shorter-lived asset classes, businesses can often accelerate depreciation deductions. Because this approach requires technical and engineering analysis, it’s most effective when evaluated early — ideally before or shortly after a purchase agreement is signed.
Newer provisions have added complexity. For example, recent guidance introduced a new election for certain qualified production property, expanding potential benefits for facilities that support manufacturing. In some cases, even existing buildings — such as warehouses or dormant facilities — may qualify when repurposed for production from another use, depending on how they’re acquired and when they’re placed into service.
The common thread across these scenarios is timing. Businesses often make capital purchases first and consult tax advisors later, which can limit available options. Involving tax advisors earlier in the process can help ensure depreciation methods, elections and classifications are aligned with cash flow and long-term planning goals.
3. Has your state tax exposure changed due to growth or remote work?
State tax exposure is one of the most common — and least visible — ways businesses either leave money on the table or take on unnecessary risk. As operations evolve, a company’s state tax footprint can change quietly, often without triggering obvious internal alerts.
Remote and hybrid work arrangements have fundamentally reshaped nexus considerations. Employees working from home in different states can create income, sales and payroll tax obligations — even when a business has no physical office in that location. In other cases, employees traveling into a state for projects, installations or customer support may establish nexus based on the duration or nature of their work.
These changes don’t always show up clearly in traditional financial reports. Payroll records may include names and wages, but they rarely capture the qualitative details that matter for state tax purposes: where work is performed, how long employees are present in a state or whether their activities rise to the level of taxable presence. Without that context, potential exposure can go unnoticed until an audit, transaction or expansion brings it to light.
Operational changes beyond remote work can have similar effects. Expanding into new markets, shifting manufacturing or distribution activities or launching new lines of business can all alter a company’s nexus footprint. Even workforce initiatives — such as targeted hiring programs or changes in contractor usage — can introduce state-specific tax considerations that aren’t immediately obvious.
Revising state tax exposure periodically allows businesses to identify both risk and opportunity. A proactive review can help address exposure early, clarify compliance obligations and avoid surprises that disrupt cash flow or complicate future growth.
Why proactive tax planning creates an advantage
In many organizations, tax simply isn’t part of day-to-day decision-making. Growth initiatives move quickly, often driven by executive or board priorities, while tax considerations follow later — after transactions are complete and the focus shifts to compliance. When tax is only consulted after the fact, opportunities tied to timing, elections or structuring may no longer be available.
For large enterprises, identifying and documenting opportunities such as R&D credits or cost segregation studies are routine parts of compliance. In smaller organizations, however, tax responsibilities are more likely to be spread across fewer people or combined with other roles. In that case, opportunities aren’t surfaced unless someone knows to ask the right questions at the right time.
The irony is that many of these opportunities are economically efficient when pursued correctly. In practice, the cost to evaluate and document eligibility is often a fraction of the benefit.
While hesitation is understandable, there’s risk in not exploring opportunities — especially when competitors are doing so. Early adopters of legitimate tax strategies can gain meaningful advantages, such as lower tax expense, stronger cash flow and more capital to reinvest in operations.
How to identify tax savings opportunities this quarter
Closing these gaps doesn’t require a complete overhaul. Often, it starts with a conversation to ensure tax advisors understand what’s happening across the business — not just at year end, but as decisions are being made.
That includes discussing capital investments, changes to processes or systems, hiring initiatives, expansions into new markets or major transactions under consideration. When advisors have more visibility into operational plans, they’re better positioned to identify opportunities and flag risks before decisions are finalized.
Are you leaving money on the table?
How Wipfli can help
Wipfli’s tax professionals help businesses identify and act on opportunities that are often overlooked during day-to-day growth. From credit and incentive analyses to capital investment planning and state and local tax strategy, we can help you connect operational decisions to tax outcomes that improve cash flow and reduce risk. Learn more about Wipfli’s tax services, then contact us to discuss strategic tax planning.
