81–90 of 957 posts
Other than it’s nice not to have your profession taxed, what is the argument that software development shouldn’t be taxed as opposed to all sorts of other white collar work?
This isn't changing if it is taxed or not. It is merely about if the tax should be paid in the year the work was done, or spread over the 5 years after the work was done.
Signed. That said, here's my perspective on 174 (which should be reverted to full deduction on the year the expense is incurred). You do not have to amortize 100% of your engineering costs. Not even close. Here's the key: Development costs incurred to remove uncertainty are amortized. All other costs are deductible during the tax year where they are incurred. How does this work? You are going to design a new robot ar…
> 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.
i.e. it needs to be amortized. That's the part that people find most objectionable -- software development is special-cased for unfavorable tax treatment that does not apply to other fields.
[1] https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim...
For folks that don't know the background on this, here's a layperson summary: - A business is usually taxed on its profits: you deduct your revenue from the cost of producing that revenue, and the delta is what you are taxed on. - In software businesses, this usually means if you spend $1M in software development to develop a web app, and it makes $1.1M in that year, you'd get taxed on the $100K profits. - However, a…
Why do you assume a 50% tax rate in the United States when it is only 21%?
But it's still useful to know the real rate is 21%, thanks.
For folks that don't know the background on this, here's a layperson summary: - A business is usually taxed on its profits: you deduct your revenue from the cost of producing that revenue, and the delta is what you are taxed on. - In software businesses, this usually means if you spend $1M in software development to develop a web app, and it makes $1.1M in that year, you'd get taxed on the $100K profits. - However, a…
Why do you assume a 50% tax rate in the United States when it is only 21%?
This is less on that specific topic and more general: While I enjoy the hacker news forums a great deal, I've no relationship with YC as an org. I am not sure that YC has any particular interest in things that might impact me as an individual contributor in an org as much as it impacts them. Understandably there's an everyone for themselves aspect here, but that makes these kinds of call to actions a bit hollow to me…
This tax treatment can increase the cost of a dev by 5-15% which leads to less hiring and a looser job market. Which will impact us even if we're not looking for work because most companies look at market rates when deciding raises.
For folks that don't know the background on this, here's a layperson summary: - A business is usually taxed on its profits: you deduct your revenue from the cost of producing that revenue, and the delta is what you are taxed on. - In software businesses, this usually means if you spend $1M in software development to develop a web app, and it makes $1.1M in that year, you'd get taxed on the $100K profits. - However, a…
It was Trump's 2017 Tax Cuts and Jobs Act, which amended IRS code.
Signed. That said, here's my perspective on 174 (which should be reverted to full deduction on the year the expense is incurred). You do not have to amortize 100% of your engineering costs. Not even close. Here's the key: Development costs incurred to remove uncertainty are amortized. All other costs are deductible during the tax year where they are incurred. How does this work? You are going to design a new robot ar…