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Thousands of small businesses are struggling because of R&D amortization

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Re: Thousands of small businesses are struggling because of R&D amortization

#181

Post by BenFranklin100 »

jackthetab wrote: post #176
pclmulqdq wrote: post #121

I have said this before and attracted downvotes for it, but here goes. There are two possible arguments here to try, and I have only ever seen people lobbying against this change use the one, less persuasive argument. That argument is what I will call the "incentives" argument: that change in the rule provides bad incentives against doing R&D. This argument goes along the lines of "this will cost jobs for R&D workers…

So, just what _is_ "the accounting argument"? I don't know enough accounting to figure it out for myself.

For one, companies will be encouraged to classify R&D as operational expenses where they can. This distorts the overall picture of the business’s fundamentals.

Re: Thousands of small businesses are struggling because of R&D amortization

#182

Post by BenFranklin100 »

wernercd wrote: post #178
Dalewyn wrote: post #135

Earlier quoted context omitted.

>the responses to this argument I have seen from non-tech people range from "fuck you" to "deal with it." Two factors also don't help matters either: * Most people, which perhaps surprisingly includes most commenters here, don't understand what taxes are levied against or what losses and amortization even are. You can't effectively argue against something you don't understand. * Of the people who do understand taxes…

"tax avoidance" Otherwise known as what every sensible and smart person does because that's not the "governments money". AKA: "How dare people want to keep their own money and not freely give up larger and larger percentages to ever larger government programs that are inefficient cesspools of mismanagement and corruption". I'll match people saying "fuck you for wanting to keep your own money" with a fuck you for supp…

I bet you if the commentator you’re responding to owns a home, they take the mortgage home tax deduction.

Re: Thousands of small businesses are struggling because of R&D amortization

#183

Post by jayd16 »

slotrans wrote: post #139

Possibly the most unpopular argument of all: do not comply. Change your employees job titles and/or tax classifications if you have to. Whatever it takes to say "these are salaries, not R&D". If you're big enough they'll notice, but for a 10-person company the risk of a bad audit beats certain bankruptcy.

Would be pretty ironic if this forces the drop of "exempt" status and overtime pay comes into the picture.

Re: Thousands of small businesses are struggling because of R&D amortization

#184

Post by username332211 »

BenFranklin100 wrote: post #181
jackthetab wrote: post #176

Earlier quoted context omitted.

So, just what _is_ "the accounting argument"? I don't know enough accounting to figure it out for myself.

For one, companies will be encouraged to classify R&D as operational expenses where they can. This distorts the overall picture of the business’s fundamentals.

I was under the impression American companies already have to maintain 2 sets of books anyways.

After all, the IRS doesn't use GAAP.

Re: Thousands of small businesses are struggling because of R&D amortization

#186

Post by baybal2 »

BenFranklin100 wrote: post #181
jackthetab wrote: post #176

Earlier quoted context omitted.

So, just what _is_ "the accounting argument"? I don't know enough accounting to figure it out for myself.

For one, companies will be encouraged to classify R&D as operational expenses where they can. This distorts the overall picture of the business’s fundamentals.

[dead]

Re: Thousands of small businesses are struggling because of R&D amortization

#187

Post by Leherenn »

KittenInABox wrote: post #160
bbojan wrote: post #155

Earlier quoted context omitted.

It's very easy to fire in Switzerland. The notice periods are usually longer than in North America, but everyone having unemployment insurance where they are paid ~80% of their salary for up to 2 years makes is not such a big deal.

Can you say more about unemployment insurance? I haven't heard of this [a us worker] and honestly I also wouldn't mind being more aggressive with my career if I can guarantee ~80% of my income for 2 years should I lose a job.

You have a mandatory deduction on your salary (2.2%, a bit less effectively if you make over 150k). You need to have contributed for at least a year in the past 2 years before you're eligible.

You get 70% of your salary (or 80% if you have children under 25) for two years, capped at 70% (or 80%) of 150k.

There are a lot more exceptions, special cases and so on, but that's the gist of it.

Re: Thousands of small businesses are struggling because of R&D amortization

#188

Post by telesilla »

mjwhansen wrote: post #85
telesilla wrote: post #39

Take action and sign up for the Small Software Business Owners Association newsletter and petitions to the government: https://ssballiance.org/ Michele Hansen is doing an incredible job here and should be recognized for it. Latest news was sent yesterday: Republicans and Democrats finally struck a tax deal that includes a partial fix for Section 174. It includes expanding the Child Tax Credit, a key Democratic priori…

Thanks for linking to SBBAlliance and for the kind words! But seriously, thank me when it’s fixed. (Counting chickens before they’ve hatched, etc etc)

Sounds promising -

https://www.cnbc.com/2024/01/19/bipartisan-tax-bill-clears-k...

The strong bipartisan showing in the House Ways and Means Committee adds more momentum to the proposed changes, which include allowing the immediate expensing of research and development costs.

Re: Thousands of small businesses are struggling because of R&D amortization

#189

Post by kolanos »

BenFranklin100 wrote: post #182
wernercd wrote: post #178

Earlier quoted context omitted.

"tax avoidance" Otherwise known as what every sensible and smart person does because that's not the "governments money". AKA: "How dare people want to keep their own money and not freely give up larger and larger percentages to ever larger government programs that are inefficient cesspools of mismanagement and corruption". I'll match people saying "fuck you for wanting to keep your own money" with a fuck you for supp…

I bet you if the commentator you’re responding to owns a home, they take the mortgage home tax deduction.

Can't you only deduct the mortgage interest? Or are you referring to something else? The mortgage interest deduction turns out to not be very much in practice, in my experience, anyway.

Re: Thousands of small businesses are struggling because of R&D amortization

#190

Post by krab »

KittenInABox wrote: post #160
bbojan wrote: post #155

Earlier quoted context omitted.

It's very easy to fire in Switzerland. The notice periods are usually longer than in North America, but everyone having unemployment insurance where they are paid ~80% of their salary for up to 2 years makes is not such a big deal.

Can you say more about unemployment insurance? I haven't heard of this [a us worker] and honestly I also wouldn't mind being more aggressive with my career if I can guarantee ~80% of my income for 2 years should I lose a job.

It's a kind of a tax - computed from your income. Similar to health insurance (in Europe). There are caveats like "you must be actively looking for a job" and "you weren't fired for an offense".
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