841–850 of 957 posts
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If a software project fails can we claim depreciation, like after a car crash?
Well, until now you automatically had depreciation. In the future you will still get it automatically, just deferred.
But if you're in a crash, and it's a total loss, you can depreciate faster, which is helpful because you might need to buy a new one.
So, since they're assets, can we write off software projects that fail?
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The Republican Party is actively antagonistic to any legislation from the Democratic Party basically. You need a 60% vote or you need to take away someone else’s pie. Medicaid/medicare/social security are current contenders based on Republican planning. The bigger issue is Republican voting districts gain less from putting it back in place. Most software devs are on the coasts and Denver.
Uhm, but the Democrats held the House and Senate for two years during the Biden administration, which came after the Trump tax cuts.
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The number of threads and the comments in those threads. e.g. from a few days ago: https://news.ycombinator.com/item?id=44208063 https://news.ycombinator.com/item?id=44208875 https://news.ycombinator.com/item?id=44207240 https://news.ycombinator.com/item?id=44205579 https://news.ycombinator.com/item?id=44205479 https://news.ycombinator.com/item?id=44204864 https://news.ycombinator.com/item?id=44204808 https://news.yc…
Thanks - interesting to focus on tax cuts for the already rich but I guess it does make sense if the people here want it.
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The word “just” in your comment disgusts me
Why? They're suggesting you spend a minute or two per month thinking about it, not meticulous tracking. That might not be practical , but what they are describing is a perfectly good use of the word "just".
So no, "just" is hardly fair.
Signed. As a US-based developer, I fully support restoring the deductibility of software development expenses. This policy change quietly gutted countless startups and engineering teams—it’s long past time we fix it. Appreciate YC and folks like @itsluther pushing this forward. This isn’t just a tax issue—it’s about keeping innovation and talent thriving in the US. Let’s get it done.
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I'm writing to express my urgent concern regarding the negative impact of the 2022 Section 174 tax code changes on small businesses like mine. As owner of Rietta, Inc., a small cybersecurity firm, I still do much of the technical work. My wife and I have three young children under 6. My family and I have been directly negatively impacted by these changes from the 2017 act.
Previously, the tax code helped us afford open-source and experimental work that benefited customers. For example, modernizing applications to run on Docker improved testing and deployment. Our State government clients now benefit, but this was once experimental. Now we're largely back to just work-for-hire consulting, treated as cost of goods sold. I don't have the cash to pay for experimental software development only to then amortize it over five years. If I have $100k revenue and spend $100k, the current code allows only a $20k deduction. I owe taxes on the other $80k despite no cash or documented asset value. Experimental software doesn't work like that in this field.
I started this business 26 years ago. We provide important long-term custom programming and update work for private sector and State government clients ("STATE A" and "STATE B" judicial branches). Often, we work with code we didn't originally write.
As a professional computer scientist and business owner, I rely on my CPA for tax compliance. If I've erred in my example, that's on me. But I can tell you this amortization requirement particularly cripples small businesses like Rietta, Inc., where cash flow is critical, severely limiting the quality of services I can afford to provide. I support undoing this tax change.
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Forgive the naive question, but is this different than other payrolled employees? So for normal employees you get the deduct the year it's paid, but for some reason for software developers you have to amortize it?
Theoretically it’s the same with any asset you pay someone to make. If you pay someone to make a chair, you don’t deduct the salary. Instead you create an asset valued at what you paid to build it, then depreciate it over time. The arguement for this is that it would be inconsistent to do otherwise. After all, why should buying a chair from someone else be different than paying an employee to do it? It’s worth noting…
If they make the chair. What if they only draw up blueprints for a chair that isn't manufactured? What if the chair is never manufactured, or won't be manufactured for two years? Until the software is licensed and installed at a customer site, how is this at all like making a chair?
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Machinists also produce semi-durable assets. Should we depreciate the output of their labor, too? Like others in the thread, I view this as an assault on blue states or maybe to soften my vindictive tone, as an assault on those who are not his core constituents.
IF the machinists are doing R&D, they get the same treatment as software engineers.
For machinists, it is up to the employer whether to treat their work as R&D or a regular expense.
After Sec 174, for s/w developers, there is no choice.
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> Correct me if I'm wrong, but if a company hires someone to say, mine coal or brew beer, the expense of those employees is an expense any company can claim a full tax deduction on. If you're a line chef or wait tables, your salary is tax deductible to the restaurant. The question is: are you getting the value of that work in the same tax year, or is it creating an asset that creates value over time? If you hire a gu…
Yeah this is the most plausible interpretation. Software engineers being taxed similar to brewery design engineers seems reasonable, not the person literally brewing each batch of beer.