New IRS Guidance on Amortizing R&D Costs

At a glance Schedule a consultation with Aprio’s Section 174 and R&D Tax Credit Team today. The full story: On Friday, September 8, 2023, the IRS issued Notice 2023-63, providing long-awaited guidance on the capitalization and amortization of specified research or experimental (SRE) expenditures under Section 174. Although only interim guidance, the IRS has indicated…

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Innovating the R&D Credit

At a glance The full story: If you’re claiming the R&D Tax Credit, then your company likely prioritizes innovation and ingenuity. As R&D credit providers, we often see these clients become frustrated when faced with the tired, traditional accounting practices that are often applied in the calculation of the credit, which leads to meeting after…

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When are U.S. Government Contractors Eligible for the R&D Tax Credit?

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At a glance The full story: Many companies often incorrectly assume that any work performed as part of the scope of a government contract is disqualified from the R&D Tax Credit because it is government-funded. In actuality, many of the research and development activities involved through the performance on government contracts can qualify, meaning government…

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Will Claiming the R&D Credit Result in an Audit?

At a glance The main takeaway: Claiming the R&D credit on a timely-filed return will not automatically trigger an audit, but any company benefitting from the credit should be prepared for the possibility. Thorough documentation and support from a skilled tax advisor can help. Impact on your business: An unsuccessful audit could result in the…

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Raising the Stakes for R&D Tax Credit Refunds

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At a glance The main takeaway: The transition year provided with the new filing procedures for R&D credit refunds is more than halfway through, so businesses considering amending to claim a refund should act soon to take advantage of the ability to potentially perfect denied claims. Weighing costs and benefits: The additional time and costs…

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How Changes to R&D Deductions will Impact your Tax Burden

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At a glance The main takeaway: Changes to Section 174 require taxpayers to capitalize and amortize all R&D costs, which could significantly increase companies’ tax burdens. Impact on your business: Companies that have been consistently investing in R&D can expect to pay more in taxes, while companies previously in losses could be at risk of…

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Maximizing Your R&D Credit as an ERC Recovery Startup Business

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At a glance The main takeaway: ERC recovery startup businesses aren’t excluded from claiming the R&D Tax Credit, but strict rules prevent companies from receiving double benefits. Impact on your startup: The right strategy could help you maximize both credits and increase cash flow by reducing your payroll tax liability through fully refundable credits. Next…

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It’s Official: Software Development Included in Tax Definition of R&D

At a glance The bad news: Changes to the tax code recently went into effect requiring all R&D costs to be capitalized and amortized, including software development. The good news: These changes provide more clarity regarding the eligibility to classify all internally-developed software as R&D costs, further strengthening the position to include certain software development…

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