341–350 of 369 posts
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How would you classify software _developers_ if not under Research & _Development_?
We'll call them "sustaining engineers" and define most features as "bug fixes." Problem solved.
Why would I be on the side of someone willing to go through all this trouble just to avoid paying American wages? Frankly, I would prefer you not start a business or do it elsewhere.
This affects all US software companies, even when you hire US employees.
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No, what you linked to there specifically says that "In the case of a taxpayer’s specified research or experimental expenditures for any taxable year", _then_ any software development is classified as R&D for the purpose of requiring capitalization. I don't see anywhere saying that _any and all software development_ is considered "research or experimental". Ie., if some company pays you to build a piece of software a…
The link literally says that: > For purposes of this section, any amount paid or incurred in connection with the development of any software shall be treated as a research or experimental expenditure.
> (a)In general > In the case of a taxpayer’s specified research or experimental expenditures for any taxable year—
So if you are not doing "research or experimental expenditures", all of the specifications in this section do not apply to you.
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Those are physical things that had to be amortized anyway, and I had planned for that.
That's not correct through '27: https://tax.thomsonreuters.com/en/glossary/bonus-depreciatio... It also applies to e.g. saas used for software development, which never would be depreciated over time previously. So your paid GitHub account? Amortize it over 5 years.
Earlier quoted context omitted.
No, what you linked to there specifically says that "In the case of a taxpayer’s specified research or experimental expenditures for any taxable year", _then_ any software development is classified as R&D for the purpose of requiring capitalization. I don't see anywhere saying that _any and all software development_ is considered "research or experimental". Ie., if some company pays you to build a piece of software a…
> Ie., if some company pays you to build a piece of software and you hand it over when you're done, you were not engaged in research/experimental expenditures if you paid people to build said software. Then it's your customer's R&D, and they have to amortize their payment to you. If you're doing outsourced software development for SMBs and startups, you might not be directly taxed under this rule, but your customers…
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Taking a 30% hit on business income is a significant thing.
Tech startups are usually “let’s take a gamble” not “let’s pencil in 30% tax deductions.” I’m all for not paying taxes but it’s not typically part of the calculus before starting something.
(As far as I can read it, if passed it would delay this until 2025, likely with the intent to change the laws before that but with more time to debate.)
To be fair, accelerated R&D amortization (immediate full expensing in the year the expense was incurred) is a tax loophole . Essentially, the default tax treatment of expenses is basically to take the expense same as you would treat it under GAAP, but some people (I am one of them BTW) think that we should put a finger on the scales for the case of legitimate R&D. Now though I happen to think accelerating it is a goo…
What's more absurd than life itself is that you can deduct 100% of a 6000GVWR truck which you financed for 7 years, but my engineers salaries aren't deductible because I'm "building some product" so that's "development".
I mean give me a freaking break.
Is anyone here capable of cogently summarizing The Tax Relief for American Families and Workers Act of 2024, its likelihood of passing into law, and whether that will actually fix this? (As far as I can read it, if passed it would delay this until 2025, likely with the intent to change the laws before that but with more time to debate.)