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    Amortization of R&D in tax returns

    @613jono Yeah... that's pretty brutal though! Was going to hire another developer, but hard to do when I can only deduct 10% of their salary in the first year!
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    Amortization of R&D in tax returns

    @melody7 They did it to reduce the revenue impact in the 2017 tax bill. It was always assumed that this portion would be repealed... but it hasn't been. There's a good article on it here: https://www.wsj.com/articles/small-businesses-face-big-tax-bills-from-research-deduction-change-a189b113
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    Amortization of R&D in tax returns

    @ab24 ALL software development is now officially classified as R&D. It's now explicitly in the law. Look at 174.c.3 here https://www.law.cornell.edu/uscode/text/26/174
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    Amortization of R&D in tax returns

    @613jono You're wrong. All software development is now R&D under Section 174 and must be amortized. There's no option to NOT amortize software dev (and all the large firms have more or less confirmed this, but there may be some wiggle room for, e.g., QA). Credits are separately determined under...
  5. C

    Amortization of R&D in tax returns

    R&D can no longer be deducted as a normal business expense but must be amortized across 5-15 years. This is due to a rewrite of "Section 174" which requires—starting in tax year 2022—this treatment. My CPA is completely clueless on this. This is really hard on small software companies as...
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