On Thursday, December 22nd the Senate passed the Omnibus budget bill and the House is expected to pick it up quickly. One section glaringly missing from this large piece of legislation is tax extenders. With the extenders not passing it is important to review what this means for taxpayers.

Dave McGuire gives an overview of the prevailing wage requirements.

On November 29th, the IRS released Notice 2022-61 providing detailed guidance on the prevailing wage and apprenticeship requirements under the Inflation Reduction Act of 2022 (IRA). Under the IRA certain credits and deductions are increased if prevailing wage requirements are met.

Craig Fouts talks about his role within our Fixed Asset Services practice and what our Cost Segregation consultants do day to day to serve our clients.

In his latest piece in Accounting Today, Dave McGuire discusses the changes resulting from the Inflation Reduction Act of 2022, including those affecting the 179D and 45L.

In his latest piece in Accounting Today, Dave McGuire discusses how businesses and professionals who plan for a recession will not only be able to weather these changes but also may be in a position to capitalize on opportunities as they present themselves.

In this webinar, Dave McGuire discusses how taxpayers can utilize depreciation and other timing issues to prepare for recessionary pressures.

Dave McGuire discusses the IRS Audit Technique Guide revisions and provides his thoughts on what practitioners need to pay close attention to in cost segregation moving forward.

Dave McGuire shares depreciation considerations for 2022 and how clients can make smart depreciation decisions to maximize value for their business.

Many real estate trends are dominating the market, including the growth of short-term rentals, a heated residential market, growth in industrial space, and an uncertain office environment. These trends combined with increasing inflation and interest rates makes planning for 2022 more complicated than ever.

Update on Omnibus and Tax Extenders

On Thursday, December 22nd the Senate passed the Omnibus budget bill and the House is expected to pick it up quickly. One section glaringly missing from this large piece of legislation is tax extenders. With the extenders not passing it is important to review what this means for taxpayers.

One of the most talked about provisions is the new 174 amortization requirement. Prior to 2022 businesses had an option to elect to deduct qualified R&D expenditures in the year incurred, or to amortize them over five years. As part of the 2017 Tax Cuts and Jobs Act, the ability to immediately deduct expenses was removed beginning in 2022. This was widely seen as a budgetary item, as was expected to be addressed before implementation. However, Congress has not been able to fix this provision in the five years since the TCJA was passed.

It is important to note the difference between 174 and the R&D tax credit. The R&D tax credit is based on a stated percentage of R&D expenditures such as wages and supplies that qualify under Section 41. While all section 41 expenses are 174, not all 174 costs are eligible under section 41. This means calculating an R&D tax credit under section 41 does not increase the amount of 174 expenses but does help offset the tax liability created by the 174 amortization requirement.

In addition to 174 amortization, the status of other business extenders is unclear. These include the change to the calculation of Taxable income for 163(j), and the reduction of bonus depreciation to 80%. While the new Congress promises to pick these up in 2023 it is important for businesses to start working with the laws as they currently exist.

David McGuire is a leading expert on cost segregation, fixed assets and depreciation law 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.