What is SECTION 174 and how does it impact the R&D tax credits?

[@monicak2672]

Do you have to take the R&D credit? Does that get you out of 174 Amoritization?

[@qmtax]

You do not have to take the credit. We recommend it because it's very valuable for most businesses. But yes, if you don't take the credit you'll avoid the amortization for it

[@vlosa2439]

SECTION 174 is anti constititoional because it goes against article 1 section8 clause 8 of the U.S. constition. : [The Congress shall have Power . . . ] To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries. Inventors can't benefit from this clause because most of us wont be able to reach it due to bad language in Section 174.

[@DesignedByMayo]

Are salaries and employee benefits still tax deductions? Those deductions are still around. This change only affects the stuff companies buy, like equipment and real estate. So, what's the deal? Well, the old rule could've been misused. Picture this: a CEO rents a fancy beachfront place and claims they're brainstorming a new product. Sneaky, right? But hey, businesses can still hire folks for R&D (that's 'research and development') because salaries and benefits are still deductible. You just can't play money games the old way anymore. So, chin up! Get creative with R&D and you'll be fine. Can someone explain it to me like I'm 5 if I've got it wrong?

[@qmtax]

The deductions you're talking about are different than the Credit available through R&D. The credit is on top of deductions and is refundable, meaning you can get a check. It's also 3 years retroactive unlike deductions

[@JohnnyMayHymn]

This still isn't fixed and it's affecting software jobs

[@qmtax]

Exactly. We're hoping this is addressed in the new Congressional Tax Bill about to be passed

[@MuktoPakhi-dm1sc]

@@qmtax Hi, I want to say something about your video. Can i?

[@DesignedByMayo]

Are salaries and employee benefits still tax deductions? Nope, those deductions are still around. This change only affects the stuff companies buy, like equipment and real estate. So, what's the deal? Well, the old rule could've been misused. Picture this: a CEO rents a fancy beachfront place and claims they're brainstorming a new product. Sneaky, right? But hey, businesses can still hire folks for R&D (that's 'research and development') because salaries and benefits are still deductible. You just can't play money games the old way anymore. So, chin up! Get creative with R&D and you'll be fine. Can someone explain it to me like I'm 5 if I've got it wrong?