Section 174 Overview
As part of the Tax Cuts and Jobs Act, taxpayers will no longer have the option of expensing Section 174 costs and will be require to amortize them for tax years beginning after December 31, 2021. These costs include not only expenses included in the R&D Credit, but other costs related to research and development as well. While there is bipartisan support to delay or eliminate this requirement, it is important to understand the current legislation in order to properly plan for tax year 2022 and going forward.
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Resources
- Podcast
- Webinar
- In The News
R&D Tax Credits Update
David Seibel, senior manager in our R&D practice, returns to McGuire on the Wire to give an update on R&D Tax Credits, including Section 174. He overviews where we stand now that we've gotten through the 2022 filing season and move into tax planning for 2023 and beyond.
Distinguishing Section 174 from Section 41
In this webinar, David Seibel and TJ Sponsel walk through distinguishing Section 174 from Section 41. David and TJ overview the current landscape, explain the technical differences, discuss how CPAs should be approaching this with clients, and how to construct 174 calculations. The webinar concludes by overviewing the firm’s current and future outlook for the R&D tax credit.
Is the R&D Credit 280C election still relevant?
There has been much discussion recently regarding the Tax Cuts and Jobs Act Section 174 amortization requirement that took effect for tax years beginning after Dec. 31, 2021.
Because of this provision, taxpayers are now required to amortize their research expenditures over five years for domestic costs and 15 years for foreign research costs. However, a conforming amendment in Section 280C has the potential to provide a much-needed boost to those companies that also claim the Section 41 R&D Credit.
How McGuire Sponsel Can Help
Proactive and strategic planning is critical in guiding clients through this change. If you or your clients need assistance or perspective on how to proceed, our R&D Tax Credit team at McGuire Sponsel has the technical expertise in both IRC 174 and IRC 41, and can assist in helping your clients navigate through this law change.
All Recent Section 174 Resources
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blogR&D Tax Credit ServicesJanuary 16, 2024Lawmakers Introduce Bill to Delay Implementation of Section 174 Amortization
by David Seibel, EAOn January 16, 2024, Senate Finance Chair Ron Wyden (D) and House Ways & Means Chair Jason Smith (R) introduced...
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podcastsR&D Tax Credit ServicesOctober 12, 2023
McGuire on the Wire Episode 82
by Jamie Skerston & Tim LeMastersJamie Skerston and Tim LeMasters join the podcast to discuss our approach, R&D Tax Credits, and navigating 174 discussions.
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podcastsAlliance NetworkSeptember 15, 2023
McGuire on the Wire Episode 80
by TJ Sponsel & David Seibel, EATJ Sponsel and David Seibel, EA, join the podcast this week to discuss the recent IRS guidance on Section 174...
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blogR&D Tax Credit ServicesSeptember 12, 2023
IRS Releases Framework for Section 174 Amortization Guidance
by David Seibel, EAOn September 8, 2023, the IRS issued Notice 2023-63, which provides long-awaited guidance for the types of costs that must...
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podcastsAlliance NetworkJuly 20, 2023
McGuire on the Wire Episode 76
by David Seibel, EADave McGuire and David Seibel, EA, discuss where Section 174 stands today and provide guidance on how to move forward.
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blogAlliance NetworkJune 14, 2023
Build It in America Act Update
by Dave McGuireOn June 13, 2023 the House Ways and Means Committee voted to pass the “Build It in America Act.” This...
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blogR&D Tax Credit ServicesMay 18, 2023
Georgia and Indiana Latest States to Decouple from Federal Section 174 Amortization Requirement
by David Seibel, EAAs taxpayers continue to wonder if there will be a repeal or delay for the federal Section 174 amortization requirement,...
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podcastsAlliance NetworkApril 24, 2023
McGuire on the Wire Episode 72
by David Seibel, EADavid Seibel gives an update on R&D Tax Credits now that we’ve wrapped up the 2022 filing season.
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blogAlliance NetworkMarch 21, 2023
Update on 174 Amortization
by Dave McGuireAs a trusted advisor to CPA firms and their clients, McGuire Sponsel continues to monitor the status of 174 Amortization....
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blogAlliance NetworkFebruary 24, 2023
Perspectives from Jerry – Advising on Section 174 when there’s no guidance
by Jerry HammelIn this blog, Jerry Hammel advises on Section 174 when there’s no guidance.
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in the newsR&D Tax Credit ServicesJanuary 30, 2023
Yes, companies need to amortize R&D expenses
by David Seibel, EAIn Accounting Today, David Seibel discusses the Consolidated Appropriations Act of 2023. This bill included funding for the federal government for...
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podcastsAlliance NetworkJanuary 13, 2023
McGuire on the Wire Episode 67
by Jerry Hammel, CPA & Kyle RiddleJerry Hammel and Kyle Riddle give an update on the Section 174 Amortization.
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podcastsAlliance NetworkDecember 22, 2022
McGuire on the Wire Episode 66
by David SeibelDavid Seibel gives an update on the Section 174 Amortization.
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blogR&D Tax Credit ServicesDecember 12, 2022
Section 174 Amortization Updates
by David Seibel12/12/22: IRS Issues Guidance for Obtaining Section 174 Change of Accounting Method Consent; 10/24/22: Section 174 Amortization Requirement Leaves Taxpayers...
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webinarsR&D Tax Credit ServicesOctober 20, 2022
Managing Section 174 Uncertainties and the R&D Credit
by David SeibelIn this webinar, David Seibel and Tanner Niehaus discuss what constitutes qualified research activities and expenses under Section 41 and...
