Surgent's Critical Tax Season Updates: Section 174 Capitalization of Research and Experimentation Costs

Description

Among the massive tax changes in the TCJA bill was a delayed time bomb targeting the 2022 tax year. As taxpayers hold their breath hoping for a fix from Congress, tax preparers need to grapple with the law currently on the books: Section 174 capitalization of research and experimentation (R&E) costs. The change to R&E will have an outsized impact on taxpayers in industries as varied as software development, manufacturing, and financial services, from multi-billion-dollar corporations to mom-and-pop businesses, as there are no small business exceptions. This impact needs to be evaluated and quantified before filing extensions or business tax returns for 2022. This course will equip tax preparers with necessary information to educate their clients and make informed decisions on how to comply with Section 174 requirements.

Highlights

• Legislative history and hopes for “the fix”
• Why Section 174 amortization is a game-changer for certain industries
• Identifying activities giving rise to Section 174 costs
• Section 174 research and experimentation (R&E) costs and Section 41 research and development (R&D) credit: similarities and differences
• IRS guidance and areas of uncertainty

Objectives

• Understand Section 174 amortization and its impact on taxpayers
• Identify Section 174 costs
• Be aware of challenges and difficulties for the 2022 tax season

Designed For

Any accounting and finance practitioner preparing or reviewing business tax returns for 2022