by Dave McGuireMarch 21, 2023

Update on 174 Amortization

As a trusted advisor to CPA firms and their clients, McGuire Sponsel continues to monitor the status of 174 Amortization. While there is still a long way to go before this is resolved, there is at least a conversation taking place in Washington.

On March 16, Sen. Hassan of New Hampshire reintroduced the American Innovation and Jobs Act to the Senate Finance Committee. This bipartisan bill had 13 cosponsors and 1 sponsor including 7 Republicans, 6 Democrats, and 1 Independent. This bill, if enacted, would restore taxpayers’ ability to fully deduct 174 expenses. This change would impact all expenses paid or incurred in taxable years beginning after December 31, 2021.

While this is a good first step, the bill has only been introduced in the Senate Finance Committee, and there is no indication yet that this law will be voted on in the Senate. This bill still has a long way to go to become law — ­­as with most small bipartisan bills, this will most likely need to piggyback onto a larger piece of legislation to become law. That said, it is a good indication that discussions on this technical correction are ongoing. For more information, you can view the entire bill, as well as a one-page summary.

McGuire Sponsel will continue to monitor the progress of bills such as The American Innovation and Jobs Act. We also urge taxpayers affected by these laws to continue to reach out to their elected representatives to urge action. If you have any questions about the status of 174 Amortization and how to proceed with clients, please reach out to us.

Recent R&D Tax Credit Section 174 Resources

David McGuire is a leading expert on tax law, cost segregation, fixed assets and depreciation, and a co-founder of McGuire Sponsel.

McGuire is an expert on for how tax law affects depreciation. His knowledge in determining asset costs and classifications has held up against IRS scrutiny and has built the firm into a trusted industry partner.