Tell HN: Help restore the tax deduction for software dev in the US (Section 174)

at

https://hbkcpa.com/insights/proposed-tax-bill-addresses-trum...

is in part:

     Jobs Act. The bill also addresses the
     “big three” business tax provisions:
     deducting research and development
     expenses, 100% bonus depreciation,
     and loosening the rules for the
     deductibility of business interest.

     deducting research and development
     expenses

HBK

Home / Insights / Proposed Tax Bill Addresses Trump Campaign Promises and Expiring TCJA Provisions

Proposed Tax Bill Addresses Trump Campaign Promises and Expiring TCJA Provisions

Date May 15, 2025

Earlier this week, the House Ways and Means Committee released details of a multi-trillion-dollar tax-cut bill. The legislation closely follows President Donald Trump’s campaign promises of no tax on tips and overtime, tax breaks for seniors and car buyers, and extension of much of the expiring 2017 Tax Cuts and Jobs Act. The bill also addresses the “big three” business tax provisions: deducting research and development expenses, 100% bonus depreciation, and loosening the rules for the deductibility of business interest.

Key Provisions

(1) Permanent extension of individual income tax rates (no new millionaire’s tax rate)

(2) Permanent extension of the higher standard deduction with temporary increases for 2025 through 2028

(3) Additional $4,000 standard deduction for seniors (subject to income limitations)

(4) Estate and gift exemption increased to $15MM

(5) State and local tax deduction is increased from $10,000 to $30,000 (subject to income limitations)

(6) Child tax credit of $2,000 made permanent with an increase to $2,500 for 2025 through 2028

(7) Return of the $300/$600 above-the-line deduction for charitable contributions

(8) 100% bonus depreciation for assets placed in service after 1/19/25 and before 1/1/2030

(9) Full expensing of Section 174 domestic research and experimental expenses for 2025 through 2029

(10) Increase in the Section 179 deduction to $2.5MM with the phaseout beginning at $4MM

(11) Qualified business income deduction made permanent and increased to 23%

(12) Addition of a special deduction for “Qualified Production Property” which allows 100% depreciation for manufacturing buildings

(13) Eliminates many business, home and vehicle energy tax credits

(14) Creating a new round of Qualified Opportunity Zones with investor tax benefits

There is still substantial debate to come as this bill moves through Congress. We will continue to monitor developments and keep you updated on any changes that may affect your tax situation. Please contact HBK with any questions or to discuss how these potential tax changes might impact your specific financial circumstances.

So items (8) and (9) seem to have to do with deducting "depreciation for assets" and "Section 174".

At some point it gets to that level, but all of these studies show it is extremely far from that at present. This is also not at all what the IRS has been advocating going after.

The extremely cheap (for the IRS) audits you are talking about are the ones they have been doing for years because they can afford to. The tax situations are simple so don't require significant resources to audit. These are also the situations the original comment was talking about. The IRS and others have been advocating for years for the resource to go after actual tax cheats of wealthy individuals and corporations, whose tax situations are (intentionally) so complex that it is a serious investment to audit. Once you do audit them however, their tax dodging decreases for years into the future. This costs the employees and financial advisors dedicated to dodging taxes money.

The "hidden costs" you are so concerned about here, in many cases cannot be argued to exist. The people that would spend time defending violators are otherwise fully employed doing the opposite... coming up with ways to get around the taxes their employers or customers are supposed to be paying. Instead of costing $2, that comes out as getting yet another $2 out of that audit by distracting a societal parasite.

If you have a pile of cash that you have no apparent use for, or can live without, yes, it makes no difference.

I recall that there were a few people who supported things like SOPA and software patents back in those years too, but the community consensus was about as strong on those issues as it is on this.

There are so many horrific things in it, the bill must be fully opposed, not endorsed with minor changes.