Small Business LLC, Research & Development Expense (Form 6765)

[sengert]

I have a 1 member LLC and have incurred expenses in Research and Development of a product for which I own the patent.  I have done various levels of prototype to refine and experiment on the performance of the design and I have used a University's Enterprise Program to support engineering science and to perform correlation experiments.  I have read about Form 6765 for being able to document and claim these expenses, but am not finding this in TurboTax.   Am I missing something?  Or is there any means for me to claim these expenses?

[PatriciaV]

If you are reporting your SMLLC on your 1040 return, you will need to manually complete Form 6765 to calculate your credit. Then type Form 3800 in the search box in the top right and click on the Jump to link. Enter your credit from Form 6765. Print both forms and mail to the IRS. You should be able to e-file the rest of your return.

For more information, see IRS About Form 6765, Credit for Increasing Research Activities. This form is available in TurboTax for Business only. 

You also have the option to amortize Research & Development costs under Section 174. Here are the steps:

1. Open your return and go to Deductions >> Depreciation of Assets.
2. Click Update/Start.
3. Add Another Asset or Edit an existing asset.
4. Under “Tell Us About This Asset,” enter a description and date.
5. Under “Describe This Asset” choose Other (Amortizable Intangible Property).
   Under “Tell Us a Little More,” select Amortizable intangibles.
   Under "Cost" enter the total R&D costs.
   For date purchased / started using, enter "7/1/20XX" to allow a half-year amortization the first year.
   Use the drop-down under “Select a Code Section” to choose 174: Research & Experimental Costs.
   “Recovery Period” is 5 years.

Additional Information: 

• IRS Pub 535 Research and Experimental Costs in chapter 8.
• How to use TurboTax for R&D Tax credits (Community Post)