The Question

“What should we be careful about before we even think about filing an R&D credit?”

Most R&D credit problems don’t start with bad math or aggressive percentages.

They start much earlier — often months or years before a company ever files its first claim.

By the time a credit is calculated, many of the most important decisions have already been made. Some of them quietly limit value. Others create risk that’s hard to unwind later.

Understanding these early mistakes matters because they shape everything that follows.

The Short Answer

The biggest R&D credit mistakes usually happen before filing.

They come from:

• waiting too long to think about the credit,

• misunderstanding who qualifies,

• failing to separate R&D from delivery work,

• ignoring how early years affect future credits,

• and choosing providers before understanding the scope of the work.

None of these are malicious. Most are perfectly reasonable assumptions — until they compound.

1. Waiting Too Long to Think About the Credit

Many companies treat the R&D credit as something to deal with “later.”

Later might mean:

• after the product stabilizes,

• after fundraising,

• after the team grows,

• or after profitability.

The problem is that the earliest years are often the cleanest from an R&D perspective. The work is exploratory, uncertainty is high, and the people who did the work are still close to it.

Waiting doesn’t just delay benefit. It makes the story harder to tell, documentation harder to reconstruct, and decisions harder to defend.

Thinking about the credit early doesn’t mean filing immediately — it means understanding what matters while the facts are still fresh.

2. Assuming Job Titles Determine Qualification

One of the most common misconceptions is that only “engineers” or “R&D staff” qualify.

Early-stage companies rarely work that way.

Founders design architecture.
Product leaders define technical constraints.
QA tests edge cases that don’t yet have answers.
DevOps solves performance and reliability problems.

The R&D credit is based on activities, not titles.

When companies assume qualification follows org charts, they either:

• miss legitimate qualifying time, or

• overcorrect later in ways that are hard to support.

Understanding this early leads to better scoping and more realistic claims.

3. Not Separating R&D From Delivery Early On

In early teams, everything feels like R&D.

And at first, much of it is.

But over time, exploratory work gives way to execution, scaling, and delivery. If companies don’t consciously distinguish between the two, they end up with blurred boundaries that create problems later.

This doesn’t require heavy process. It requires awareness.

Even simple distinctions — such as when uncertainty ends and implementation begins — make a significant difference in how defensible a future claim will be.

4. Ignoring Base-Year Implications

Early years don’t just affect early credits. They influence future ones.

Base-year calculations determine how much incremental research exists in later years. Companies that ignore early base-year implications often find themselves surprised when credits don’t grow as expected — even though spending increases.

This is especially common when:

• early years aren’t evaluated consistently,

• methods change abruptly,

• or documentation quality varies significantly year to year.

Thinking about base years early isn’t about optimization. It’s about avoiding self-inflicted limitations later.

5. Choosing a Provider Before Understanding the Scope

Many companies choose an R&D credit provider before they fully understand:

• what work actually qualifies,

• how complex their situation is,

• or what level of support they really need.

The result is often a mismatch.

Some companies get over-engineered solutions for simple facts.
Others get lightweight approaches that collapse under scrutiny.

Understanding your scope first — even at a high level — makes every downstream decision better. Provider selection should be a consequence of clarity, not a substitute for it.

Why These Mistakes Matter More Than They Seem

None of these mistakes automatically disqualify a credit.

But they quietly shape:

• documentation quality,

• audit risk,

• year-over-year consistency,

• and long-term value.

By the time a credit is filed, reversing these early missteps is often expensive — or impossible.

The Takeaway

The most important R&D credit decisions aren’t made at filing.

They’re made when companies decide:

• when to start paying attention,

• how to define their work,

• and how seriously to take the distinction between exploration and execution.

Avoiding these early mistakes doesn’t guarantee a perfect credit.

But it dramatically increases the odds that when a company does file, the result is cleaner, more defensible, and far less stressful.

That’s the difference between claiming a credit and setting yourself up to claim it well.