You might be able to get a tax credit for your prototyping
ksrevenue.orgif you are incorporated. Well, aside from this being Kansas-only... " The credit is 6.5% of the difference between the actual qualified research and development expenses for the year and the average of the actual expenditures made during the year and the two previous tax years." Wonderful. I can take a credit for 6.5% of...umm, $0 - $0. That comes to...$0. Sometimes it sucks not paying yourself... 1) This was an IRS benefit and guideline. As I understand it, every state likely offers it. The form is at http://www.ksrevenue.org/pdf/forms/k-53.pdf 2) If you were using your savings to live on so that you could do prototyping, can that be treated as an expense? (payroll or other). This assumes you were incorporated.