Comment by aarondf
3 years ago
It very much affects bootstrapped companies building a software product. I'm not sure where you got the idea that it only affect Silicon Valley companies?
If you bootstrap your company to the point where you can afford one engineer's salary, you can only deduct 20% of that against your revenue. I.e. you've paid out all the cash and but you still have to pay taxes on the 80% that is not allowed to be expensed this year.
This is how it has always worked for non software companies...
If your business isn't solvent without tax loopholes, your business isn't really a business.
Businesses have always been able to deduct salaries at 100%. Software businesses are now not allowed to do that. I have no idea what you're talking about.