A restoration company in Norristown, Pennsylvania was looking at another year of solid revenue. Business was good. Their team had responded to hundreds of water damage calls, mold remediation jobs, and fire restoration projects across Montgomery County.
Good revenue means a bigger tax bill. That’s just how it works.
Then we asked a simple question: “Have you looked into R&D credits?”
Their answer was immediate: “We clean up water damage and remove mold. We’re not a research company.”
Twenty-three days later, they were looking at $143,862 in tax credits. For work they’d already completed. Going back four years.
The money had been sitting there the whole time. They just didn’t know to look. It’s one of the most overlooked service business tax credits available.
Service Business Tax Credits: What Most Owners Don’t Know
Here’s what most business owners know about reducing taxes before year-end: buy equipment, max out retirement contributions, accelerate expenses, defer income. Standard playbook. Your accountant probably mentions these every December.
But there’s an entire category of tax savings that rarely comes up in those conversations. Tax credits.
Credits work differently than deductions. A deduction reduces your taxable income. If you’re in a 37% bracket, a $100,000 deduction saves you $37,000. Helpful, but indirect.
A credit reduces your actual tax bill. Dollar for dollar. A $100,000 credit saves you $100,000.
The R&D tax credit under Section 41 of the tax code is one of the most valuable credits available to small and mid-sized businesses. It’s also one of the most misunderstood.
When RGW Restoration heard “R&D credit,” they pictured pharmaceutical labs and Silicon Valley startups. White coats and billion-dollar research budgets.
“I think most business owners hear ‘R&D’ and immediately tune out,” says Melissa Lang, who led the assessment for NestWorth. “They assume it’s not for them. That assumption costs them real money.”
That mental image is exactly why service business tax credits go unclaimed year after year.
What Actually Qualifies (It’s Not What You Think)
The IRS definition of qualifying research has nothing to do with lab coats.
Under Section 41, your business may qualify if you’re developing or improving products, processes, software, formulas, or techniques, and you encounter technical uncertainty along the way. You don’t need a formal R&D department. You don’t need patents. You don’t even need to succeed.
You need to be solving technical problems.
As we explain in our frequently asked questions, the four-part test the IRS uses focuses on whether your work involves experimentation to resolve technical uncertainty. Most businesses that develop or improve anything are performing some level of qualifying activity.
For RGW Restoration, that meant everyday work they’d never thought twice about:
Restoration protocol development. Every water damage situation is different. Hardwood floors versus carpet. Finished basements versus crawl spaces. The team had spent years developing standardized approaches that worked across different scenarios. That’s process development. That qualifies.
Equipment testing and evaluation. The restoration industry evolves constantly. New moisture detection technology. Better thermal imaging systems. More efficient air scrubbers and HEPA filtration equipment. Evaluating whether new equipment actually performs better than existing tools requires systematic testing. That qualifies.
Antimicrobial treatment applications. Mold remediation isn’t one-size-fits-all. Different contamination scenarios require different treatment approaches. The team had tested various antifungal and antibacterial solutions across different situations to determine what worked best. That qualifies.
Quality assurance methodology. How do you verify that moisture is completely eliminated? What testing ensures mold won’t return after remediation? Developing reliable verification procedures requires experimentation. That qualifies.
Process optimization. Faster response times. More effective containment procedures. Better coordination between team members on complex jobs. None of this happens by accident. It happens through systematic improvement. That qualifies.
“When we walked through what actually qualifies, the lightbulb went on,” Lang recalls. “They realized they’d been doing this work for years. The credits had been available the entire time.”
RGW Restoration had been performing qualifying activities for years. Work that could have been generating tax credits every single year.
The Numbers: Four Years, Six Figures
We completed the full assessment in 23 days. No disruption to their operations. No mountains of paperwork. Just a clear-eyed analysis of what they’d been doing and how it mapped to IRS requirements.
The results:
- 2021: $46,530
- 2022: $37,494
- 2023: $26,259
- 2024: $33,579
- Total: $143,862
That’s not a deduction. That’s $143,862 directly off their tax bill.
The assessment cost them nothing. We identified the qualifying activities, calculated the credit amounts, and presented the complete picture before any commitment was required. They saw exactly what they qualified for, then decided whether to move forward.
“NestWorth and specifically Melissa Lang were great to work with and delivered on all their promises,” the RGW Restoration team told us afterward.
You can see similar results from other businesses we’ve worked with across different industries.
Why Your Accountant Might Not Mention This
Most CPAs are generalists. They handle everything from individual returns to small business compliance to estate planning. They’re good at what they do. But R&D credit studies require specialized knowledge that falls outside typical tax preparation.
The qualification rules are specific. The documentation requirements are technical. The IRS scrutiny is real. Most accountants don’t have the bandwidth to develop deep expertise in this one area while also serving clients across dozens of other needs.
“We’re not here to replace anyone’s CPA,” Lang explains. “We handle the specialty work. They handle the overall tax picture. The client gets the benefit of both.”
That’s why the most effective model is partnership, not replacement. Your CPA handles your overall tax picture. A specialist handles the R&D study. Everyone communicates. No competition, just complementary expertise working toward the same goal: minimizing your tax burden.
We work alongside existing accountants on every engagement. For CPAs looking to add value for their clients, we offer partnership opportunities that keep the client relationship intact while capturing credits that would otherwise go unclaimed.
The 2025 Factor: New Law Makes This More Valuable
The One Big Beautiful Bill Act, signed in July 2025, changed the R&D credit landscape significantly.
For 2025, businesses can immediately expense domestic research and development costs instead of capitalizing and amortizing over five years. That’s a major cash flow improvement.
Even more relevant: small businesses with average annual gross receipts under $31 million can now claim R&D benefits retroactively back to 2022. If you’ve been doing qualifying work for the past few years and never claimed the credit, there’s an immediate opportunity sitting there.
“The 2025 law changes made this more valuable than it’s been in years,” Lang notes. “Businesses that act before year-end can capture multiple years of credits they didn’t know they had.”
The provisions that were set to expire have been made permanent. Businesses can plan with certainty.
For RGW Restoration, the timing worked out. They captured four years of credits. But they’d been qualifying for longer. Earlier awareness would have meant even more savings.
The Question You Should Be Asking
RGW Restoration isn’t unique. They’re proof that service business tax credits aren’t just theoretical.
They’re a service business. They show up, do skilled work, solve problems, and go home. No lab. No patents. No formal research program.
And they qualified for $143,862 in tax credits.
If you run a business where your team develops processes, tests solutions, improves methods, or solves technical challenges, you’re probably generating qualified research expenses right now. The work is happening. The credits are available. The only question is whether you’re claiming them.
Contractors who solve design and engineering problems on custom projects. HVAC companies testing equipment configurations. Landscaping businesses developing maintenance protocols. Food service operations refining recipes and processes. Professional services firms building proprietary methodologies.
All potentially qualifying. All commonly overlooked.
“The businesses that capture these credits aren’t smarter than everyone else,” Lang says. “They just asked the question.”
See What You’re Missing
If you’re running a service business and wondering whether you qualify, our assessment process takes about three weeks and costs nothing upfront. Thousands in service business tax credits go unclaimed every year.
We analyze your operations, identify qualifying activities, and calculate the exact credit amount you could claim.
You see the specific dollar figure before making any commitment. No estimates. No ranges. Clear numbers based on your actual situation.
If the number makes sense, we handle the documentation needed to claim the credits. If it doesn’t, you’ve lost nothing but a few conversations.
RGW Restoration discovered $143,862 they didn’t know existed. The work was already done. The credits were already earned. They just needed someone to show them where to look.
What’s sitting in your business that you haven’t found yet?
Schedule your free assessment and find out what your business qualifies for before year-end.
