The tax landscape for blockchain development companies is complex and often misunderstood. Dive into this case study to understand how Source Advisors cracked the code to reveal significant tax savings for a FinTech startup specializing in algorithmic cryptocurrency trading.
The company is a financial technology startup formed in 2020 with an initial team of three employees. Bootstrapped by its owners, the company is deeply involved in developing algorithmic trading strategies using probabilistic models. They specialize in signal identification and the creation of trading algorithms, focusing on the dynamic landscape of cryptocurrency.
Due to the relative infancy of blockchain and cryptocurrency, most developers do not have the types of resources available to development teams working on traditional software and platforms. As such, when this company started their work much of it was from a blank slate.
In the fast-evolving world of FinTech, this startup qualified for R&D tax credits through several key activities. These included the development of an Alpha Model for market prediction, fine-tuning of trading algorithms, and the creation of a robust data warehousing system. Each of these activities involved substantial technological uncertainties and required iterative testing, making them eligible for significant R&D tax benefits.
Source Advisors stepped in following a recommendation from the firm’s audit partner. A feasibility analysis was first conducted to give an estimate of the potential R&D tax credit benefits.
Thoroughly evaluated the alpha model and data warehousing systems to identify R&D qualifying activities.
Carried out a meticulous financial study to estimate potential R&D tax credits.
Ensured all activities were compliant with federal and state R&D tax credit laws.
Don’t miss out on the valuable tax credits that could boost your businesses growth.
Contact Source Advisors today to explore how we can unlock tax advantages for your blockchain development company.