161–170 of 369 posts
The same continuing income occurs for journalists and other fields that produce copyrighted output, in fact it's more true there since there isn't a substantial bug fixing load. So why just software and not all fields that produce durable intellectual property?
It's even more clear with copyright what the amortization period should be.
Lets pass that law and see how Disney feels about Founders' Copyright. :D
This is going to wipe out a lot of small businesses, including innovative software dev startups. Here’s a simplified example of this works: Let’s say you’re a four person software dev startup. Everybody is making, say, $125K to get by. That’s $500K in salary expense which normally you can write off as expenses against revenue/funding. For this example, let’s say somehow you also generated $500K in revenue/funding, i.…
Note that in year 2, you get 20% of the year 2 salary expense, plus 20% from year 1. So the impact is less. By year 5 you are "caught up".
Indeed the first years are harder.
This is going to wipe out a lot of small businesses, including innovative software dev startups. Here’s a simplified example of this works: Let’s say you’re a four person software dev startup. Everybody is making, say, $125K to get by. That’s $500K in salary expense which normally you can write off as expenses against revenue/funding. For this example, let’s say somehow you also generated $500K in revenue/funding, i.…
I don't get it. How is this not just $500k salary? How is it R&D?
This is going to wipe out a lot of small businesses, including innovative software dev startups. Here’s a simplified example of this works: Let’s say you’re a four person software dev startup. Everybody is making, say, $125K to get by. That’s $500K in salary expense which normally you can write off as expenses against revenue/funding. For this example, let’s say somehow you also generated $500K in revenue/funding, i.…
I don't get it. How is this not just $500k salary? How is it R&D?
In terms of tax, should we average out these expense over the years?
These can have huge difference because how complex our tax and accounting rules are.
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…
This is going to wipe out a lot of small businesses, including innovative software dev startups. Here’s a simplified example of this works: Let’s say you’re a four person software dev startup. Everybody is making, say, $125K to get by. That’s $500K in salary expense which normally you can write off as expenses against revenue/funding. For this example, let’s say somehow you also generated $500K in revenue/funding, i.…
As a SMB, if your salary expense is $500k and your revenue is $500k, you are absolutely struggling, no matter the tax situation. In this case you "just" need another $100k in revenue. After all, you are throwing out theoretical revenue numbers anyway. So it just moves the needle somewhat for you to still break even. You could game it just a little if there's revenue at end of year that you can book in the following q…
Earlier quoted context omitted.
This is actually great if true! Maybe companies will finally be incentivized to start fixing their bugs rather than cramming unwanted features and UI re-designs into their software products! However I doubt they'd leave such an obvious loophole. Surely the IRS's definition of R&D includes all types of software development activity.
It's not an "obvious loophole". They are quite specific about this. New features, new capabilities: R&D, must be amortized. Bug fixes for existing features: expensable. The gray zone comes when a bug fix actually provides a new feature (e.g. something that wasn't actually usable before).
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…
They’re calling this a business priority for the Republicans when it was a Republican House, Senate and President that passed this measure. That’s a bit too “must make it seem bipartisan” when there is a clear partisan direction. Even when this fix is passed, it will be voted for unanimously by Democrats and only a small fraction of Republicans will vote for it. Explain again to me how that makes it a Republican prio…
Like the unanimous democrat vote to repeal the SALT limits that overwhelming impacts people in California and NY?
Earlier quoted context omitted.
I don't get it. How is this not just $500k salary? How is it R&D?
The idea is: You can hire a R&D team for one year, fire the entire R&D team and still benefits from their works in the next few years. In terms of tax, should we average out these expense over the years? These can have huge difference because how complex our tax and accounting rules are.
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…