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As lolinder stated, one of the main causes of this is Section 174 where software is now amortized as R&D over 5 years which means companies can't treat is as a
by phyzix5761 2y ago
As lolinder stated, one of the main causes of this is Section 174 where software is now amortized as R&D over 5 years which means companies can't treat is as a regular expense. This leads to companies hiring less.
There is a bill that is stuck in the Senate which aims at reversing this (among other things): https://www.congress.gov/bill/118th-congress/house-bill/7024 https://www.congress.gov/bill/118th-congress/house-bill/7024
Please reach out to your senators and tell them to support this bill so our job prospects can return to normal.
- holyroller 2y agoThis is effectively a subsidy for the tech industry, why is this incentive necessary here? It's not specifically targeting startups from what I can tell and potentially just a kickback to large employers and investors.
- aaronblohowiak 2y agoWhy is forced amortization of payroll a subsidy?
- phyzix5761 2y agoAll software jobs, including those in startups, are affected by the amortization rule. It makes it harder for startups to afford more software engineers because they have to pay taxes on cash they don't actually have. The only companies the new amortization rule helps is big established firms that can afford to amortize because they have excess cashflow.