Comment by yieldcrv
2 years ago
unless they aren't deducting software development at all
there is no obligation to take a deduction. if you find yourself in a circumstance where its more favorable to not take a deduction then you don't have to report that transaction
> unless they aren't deducting software development at all
What business does not deduct salaries from their income when reporting taxes?
I'm open to a counter-example where this makes sense.
There are special deductions you can elect to take for R&D expenses. If you choose to deduct R&D expenses, you must include software development there.
If you do not chose to deduct R&D expenses, you can deduct software salaries as normal.
I personally think this makes a lot of sense.
It may make sense, but your interpretation (one I happen to agree with) is what I called #1 above. It is still unclear whether the IRS regards the rules as requiring interpretation #2 (in which paying someone to do software development MUST be treated as an amortized, capitalized R&D expense) or not.
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if you have enough other expenses that already nullified that year’s tax, and it is complex to file a certain remaining kind of expense then you don't need to do it
Wouldn’t that basically always mean you’re in the red already though?
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this is the whole crux of the matter. interpretation #2 says that the law now says that you MUST ("shall") consider all software development expense as R&D expenditures that are amortized over 5/15 years.
i personally believe that the intended/appropriate interpretation is #1 - you MAY consider software development expense as R&D and include in an R&D deduction if you choose to take one.
but it is far from clear what was intended and/or how the IRS interprets it.
that’s interesting well the IRS is going to get gutted anyway, I don’t see this particular issue being looked at with any scrutiny that requires litigation
chance of IRS being gutted: not zero but close to it. that bill from the house is incredibly unlikely to even get a hearing in the senate, and even if it did and it passed, somehow, biden will veto it (and that veto will not be overridden.
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