That is not what I am hearing from tax people and some folks I know running software agencies. I posted this here because it seems to be coming in from the blin

That is not what I am hearing from tax people and some folks I know running software agencies. I posted this here because it seems to be coming in from the blindside for the HN crowd. This is still up in the air, but the growing consensus among tax experts seems to be that, while payroll may be expensed, the percentage of that payroll used for R&E, including software development, would have to be amortized as capital. Here is a different article. It calls out just how vague this is, since there is no specific definition of what “software development costs” are: https://www.thetaxadviser.com/issues/2022/jul/legislative-changes-research-experimental-software-development-costs.html https://www.thetaxadviser.com/issues/2022/jul/legislative-ch... From this article: Taxpayers must resolve a number of technical issues that currently are not addressed in regulations or other IRS and Treasury guidance, including: - The definition or scope of R&E activities; - How software development costs are defined (e.g., whether they include installation of acquired software); - Whether Sec. 174 is an activity-based test, ownership-based test, or both; - Whether Sec. 174 requires the taxpayer to be at risk for the development; - Whether a contractor performing R&E services for a client has Sec. 174 expenditures where the contractor is not at risk and has no ownership rights in the resulting intellectual property; - The extent to which overhead costs are considered Sec. 174 expenditures; and How domestic and foreign research activities are distinguished from one another for purposes of determining whether the costs are amortized over five or 15 years.