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What would a software developer do that isn't research or development? Maybe my understanding of "research and development" is wrong. Is there a formal definiti

by cdot2 3y ago

What would a software developer do that isn't research or development? Maybe my understanding of "research and development" is wrong. Is there a formal definition that I can go by?

sangnoir 3y ago
What would a welder do that isn't research or development? I believe for both jobs certain tasks are journeyman-like, but others are legit R&D. I don't think software ought to be blanket-exempted because its done on a computer. Here's the IRS' guidance on software: https://www.irs.gov/businesses/audit-guidelines-on-the-application-of-the-process-of-experimentation-for-all-software https://www.irs.gov/businesses/audit-guidelines-on-the-appli...
- TylerE 3y ago
  > What would a welder do that isn't research or development? Weld stuff?
  - jdmichal 3y ago
    Isn't welding just "developing" metal products? That's why you have to take into account that it's "research and development", and not "research" and "development". As in research and the development of that research, not separately research and development.
    - function_seven 3y ago
      Yeah, forcing physical-world norms into technology will always result in weird shit like this. For the "real" world, Research would be studying different compounds to see which ones work well as anode or cathode. Development would be creating the industrial processes required to scale up manufacturing, or the ancillary infrastructure to support the new battery, or designing a new package for this awesome new cell. All the things that take the new thing from the lab to a marketable product. So if you come up with a new method for welding ("My new filler alloy reduces argon requirements by half!" or "My new pulsing methodology results in 23% stronger welds between dissimilar alloys.") That's Research. Then the Development of that might be "How do we manufacture these new filler rods to the exacting specs required?" or "We need to have the EE people incorporate my pulsing algo in our welders. Right now it's running on an Arduino in the lab, we need it included in next year's Welder XL4000 model." Actually doing the weld is just doing the job. So, back to software. What kind of coding is considered R&D and what is considered "just doing the job"? I guess creating new algorithms, or new features that you expect to be in the product for years to come; those would be R&D. Whereas fixing bugs, working on Kubernetes stuff, writing database backup routines, etc. would not be? I don't know. This is just my impression of the difference. I'm no economist.
      - 908B64B197 3y ago
        > So, back to software. What kind of coding is considered R&D and what is considered "just doing the job"? I guess creating new algorithms, or new features that you expect to be in the product for years to come; those would be R&D. Whereas fixing bugs, working on Kubernetes stuff, writing database backup routines, etc. would not be? I would still count the later as R&D. It's akin to having an industrial engineer re-design the manufacturing floor to accommodate for the different manufacturing process of the anodes. As soon as you need to customize something, it becomes R&D (else you would have purchased it). The "just the job" part is invisible because, well, it's the machine who's doing it (applications auto-start, install, send updates).
  - hellojesus 3y ago
    Welding stuff is developing a product. Basically the same thing software developers do. It seems like a nonsense differentiation if those are categorized differently for taxes.
    - TylerE 3y ago
      As some one who took a welding class.. no it isn’t. It’s production.
      - bluGill 3y ago
        It can be development, if you are building a prototype for example. a good welder will notice that a bracket is missing and design one one the spot so the whole can be built for now - while telling the engineers about the problem. That is a small % of welding though. Most is just straight production work. The % is open to question - if I ask you to put a winch mount on my trailer how much of that is custom R&D, and how much is production of the one off product?
        maxerickson 3y ago
        If you have an off the shelf solution, then close to 0 development. If you have a clear, standard approach to the installation, then the development is likely to be a small portion of the work. If neither of those are true then you are in the hard to figure area.
        ikekkdcjkfke 3y ago
        A carpenter building a custom solution for room x A programmer building a custom abstraction for domain feature x A plumber laying a new line from the basement to the second floor All require some surveying and development of a solution, gluing existing parts together in a unique way
        maxerickson 3y ago
        Sure, I agree, but there are likely standard approaches, especially in the older trades, where the development is making ~1 decision and then measuring. Like if the carpenter is installing some shelves, they are most likely picking a shelving system or approach they know how to work with and measuring for fit, not coming up with a brand new way to mount shelves. They might come up with a new way, it just isn't all that likely.
jdmichal 3y ago
In "research and development", that typically means "research of new ideas and methods, and developing them into commercially viable products". So are there things that software engineers do that fall under R+D? Absolutely! Is adding a sorting feature to a grid in your app one of those things? Probably not!
- dahfizz 3y ago
  You should never assume legal terms mean what they colloquially mean. Just like how "work" in physics has a precise definition which doesn't mean what it colloquially means, or "tree" in computer science. In this case, software development of any kind is explicitly included: > For purposes of this section, any amount paid or incurred in connection with the development of any software shall be treated as a research or experimental expenditure. https://www.law.cornell.edu/uscode/text/26/174 https://www.law.cornell.edu/uscode/text/26/174
  - kaitai 3y ago
    What I find most confounding is that I know some folks who do what I'd call research, in that they do EDA and develop models, but since those aren't necessarily destined for development of software, their hours are not counted in this exercise. It's too, um, researchy to qualify as research, I guess? or it's just classified as fancy analytics.
    - zamnos 3y ago
      > and develop models The debate over whether Excel counts as programming and thus software development just got a lot more heated. The question is how is "software" defined in the context of the tax code, in particular in the phrase "development of any software" from above. https://www.lawinsider.com/dictionary/software https://www.lawinsider.com/dictionary/software gives a couple definitions.
  - pclmulqdq 3y ago
    The full IRS clarification on this will helpfully be available in a few months (a few months after the deadline), but it doesn't look like things like maintenance work will qualify, only new software projects. I'm expecting that a lot of savvy companies are going to decide that a lot of software development (using the common term) is not software development in the legal sense.
deleted 3y ago
[deleted]
darth_avocado 3y ago
I still don’t understand why it has to be RnD? If I made a million dollars and spent a million in salaries, I made no profit. The government shouldn’t be taxing me on no money made. They already get taxes on the salaries I’m giving out.
- makeitdouble 3y ago
  It comes down to whether these salaries were a sheer cost and not partly an investment. If you made a million dollar and bought a million in patents, you still would have no money but wouldn't expect to be paying 0 tax, would you ? How RnD should be taxed is up for debate, but at least the logic is that it's not a simple cost (in comparison to paying a janitor to clean the office for instance)
  - darth_avocado 3y ago
    Fair enough. If you made a million dollars and bought land with it, sure you can tax it. But something as basic as employee salaries that are a cost to any business should definitely be deductible from the profits as cost of running the business. Especially when the company is supposed to pay payroll taxes and the employees themselves pay income tax on their salaries.
    - makeitdouble 3y ago
      I'm with you in that it probably needs more nuance on what exaclty the developpers are doing (TBF I haven't read the details, so maybe there is already a lot of nuance in all of it.) I kinda see many cases where a salary isn't as clear cut as a simple cost...for instance comparing two cases: - we buy for a million dollar an exclusive right on an innovative system from a freelance guy that developed it on his own - we contract for 10k a month the same guy to design and develop the same innovative system, he takes a year or two to develop it. In one case it's a purchase of an asset, in the other case it's a salary. The resulting asset is the same though.
      - tomrod 3y ago
aikinai 3y ago
Maintain services. Why was everyone expecting Twitter to go down after the layoffs if software developers only do research and development of new products?

by cdot2 3y ago

What would a software developer do that isn't research or development? Maybe my understanding of "research and development" is wrong. Is there a formal definition that I can go by?

sangnoir 3y ago

What would a welder do that isn't research or development? I believe for both jobs certain tasks are journeyman-like, but others are legit R&D. I don't think software ought to be blanket-exempted because its done on a computer. Here's the IRS' guidance on software: https://www.irs.gov/businesses/audit-guidelines-on-the-application-of-the-process-of-experimentation-for-all-software https://www.irs.gov/businesses/audit-guidelines-on-the-appli...

TylerE 3y ago
> What would a welder do that isn't research or development? Weld stuff?
- jdmichal 3y ago
  Isn't welding just "developing" metal products? That's why you have to take into account that it's "research and development", and not "research" and "development". As in research and the development of that research, not separately research and development.
  - function_seven 3y ago
    Yeah, forcing physical-world norms into technology will always result in weird shit like this. For the "real" world, Research would be studying different compounds to see which ones work well as anode or cathode. Development would be creating the industrial processes required to scale up manufacturing, or the ancillary infrastructure to support the new battery, or designing a new package for this awesome new cell. All the things that take the new thing from the lab to a marketable product. So if you come up with a new method for welding ("My new filler alloy reduces argon requirements by half!" or "My new pulsing methodology results in 23% stronger welds between dissimilar alloys.") That's Research. Then the Development of that might be "How do we manufacture these new filler rods to the exacting specs required?" or "We need to have the EE people incorporate my pulsing algo in our welders. Right now it's running on an Arduino in the lab, we need it included in next year's Welder XL4000 model." Actually doing the weld is just doing the job. So, back to software. What kind of coding is considered R&D and what is considered "just doing the job"? I guess creating new algorithms, or new features that you expect to be in the product for years to come; those would be R&D. Whereas fixing bugs, working on Kubernetes stuff, writing database backup routines, etc. would not be? I don't know. This is just my impression of the difference. I'm no economist.
    - 908B64B197 3y ago
      > So, back to software. What kind of coding is considered R&D and what is considered "just doing the job"? I guess creating new algorithms, or new features that you expect to be in the product for years to come; those would be R&D. Whereas fixing bugs, working on Kubernetes stuff, writing database backup routines, etc. would not be? I would still count the later as R&D. It's akin to having an industrial engineer re-design the manufacturing floor to accommodate for the different manufacturing process of the anodes. As soon as you need to customize something, it becomes R&D (else you would have purchased it). The "just the job" part is invisible because, well, it's the machine who's doing it (applications auto-start, install, send updates).
- hellojesus 3y ago
  Welding stuff is developing a product. Basically the same thing software developers do. It seems like a nonsense differentiation if those are categorized differently for taxes.
  - TylerE 3y ago
    As some one who took a welding class.. no it isn’t. It’s production.
    - bluGill 3y ago
      It can be development, if you are building a prototype for example. a good welder will notice that a bracket is missing and design one one the spot so the whole can be built for now - while telling the engineers about the problem. That is a small % of welding though. Most is just straight production work. The % is open to question - if I ask you to put a winch mount on my trailer how much of that is custom R&D, and how much is production of the one off product?
      - maxerickson 3y ago
        If you have an off the shelf solution, then close to 0 development. If you have a clear, standard approach to the installation, then the development is likely to be a small portion of the work. If neither of those are true then you are in the hard to figure area.
        ikekkdcjkfke 3y ago
        A carpenter building a custom solution for room x A programmer building a custom abstraction for domain feature x A plumber laying a new line from the basement to the second floor All require some surveying and development of a solution, gluing existing parts together in a unique way
        maxerickson 3y ago
        Sure, I agree, but there are likely standard approaches, especially in the older trades, where the development is making ~1 decision and then measuring. Like if the carpenter is installing some shelves, they are most likely picking a shelving system or approach they know how to work with and measuring for fit, not coming up with a brand new way to mount shelves. They might come up with a new way, it just isn't all that likely.

jdmichal 3y ago

In "research and development", that typically means "research of new ideas and methods, and developing them into commercially viable products". So are there things that software engineers do that fall under R+D? Absolutely! Is adding a sorting feature to a grid in your app one of those things? Probably not!

dahfizz 3y ago
You should never assume legal terms mean what they colloquially mean. Just like how "work" in physics has a precise definition which doesn't mean what it colloquially means, or "tree" in computer science. In this case, software development of any kind is explicitly included: > For purposes of this section, any amount paid or incurred in connection with the development of any software shall be treated as a research or experimental expenditure. https://www.law.cornell.edu/uscode/text/26/174 https://www.law.cornell.edu/uscode/text/26/174
- kaitai 3y ago
  What I find most confounding is that I know some folks who do what I'd call research, in that they do EDA and develop models, but since those aren't necessarily destined for development of software, their hours are not counted in this exercise. It's too, um, researchy to qualify as research, I guess? or it's just classified as fancy analytics.
  - zamnos 3y ago
    > and develop models The debate over whether Excel counts as programming and thus software development just got a lot more heated. The question is how is "software" defined in the context of the tax code, in particular in the phrase "development of any software" from above. https://www.lawinsider.com/dictionary/software https://www.lawinsider.com/dictionary/software gives a couple definitions.
- pclmulqdq 3y ago
  The full IRS clarification on this will helpfully be available in a few months (a few months after the deadline), but it doesn't look like things like maintenance work will qualify, only new software projects. I'm expecting that a lot of savvy companies are going to decide that a lot of software development (using the common term) is not software development in the legal sense.

deleted 3y ago

[deleted]

darth_avocado 3y ago

I still don’t understand why it has to be RnD? If I made a million dollars and spent a million in salaries, I made no profit. The government shouldn’t be taxing me on no money made. They already get taxes on the salaries I’m giving out.

makeitdouble 3y ago
It comes down to whether these salaries were a sheer cost and not partly an investment. If you made a million dollar and bought a million in patents, you still would have no money but wouldn't expect to be paying 0 tax, would you ? How RnD should be taxed is up for debate, but at least the logic is that it's not a simple cost (in comparison to paying a janitor to clean the office for instance)
- darth_avocado 3y ago
  Fair enough. If you made a million dollars and bought land with it, sure you can tax it. But something as basic as employee salaries that are a cost to any business should definitely be deductible from the profits as cost of running the business. Especially when the company is supposed to pay payroll taxes and the employees themselves pay income tax on their salaries.
  - makeitdouble 3y ago
    I'm with you in that it probably needs more nuance on what exaclty the developpers are doing (TBF I haven't read the details, so maybe there is already a lot of nuance in all of it.) I kinda see many cases where a salary isn't as clear cut as a simple cost...for instance comparing two cases: - we buy for a million dollar an exclusive right on an innovative system from a freelance guy that developed it on his own - we contract for 10k a month the same guy to design and develop the same innovative system, he takes a year or two to develop it. In one case it's a purchase of an asset, in the other case it's a salary. The resulting asset is the same though.
    - tomrod 3y ago

aikinai 3y ago

Maintain services. Why was everyone expecting Twitter to go down after the layoffs if software developers only do research and development of new products?