6 ms·

Awesome, this literally could not be better for American tech workers.

by macinjosh 1y ago

Den_VR 1y ago
So payroll for R&D is now entirely tax deductible? Businesses get to choose to pay taxes or do R&D for themselves?
- lazide 1y ago
  Either scenario taxes are paid - it’s just how and over what time period.
  - tomrod 1y ago
    In the long run, we are all dead. 20% depreciation per year for any software developed is a burden for all but the largest of companies.
    - bobmcnamara 1y ago
      This matched capex software. Weird how the depreciation schedule changes based on how the software was acquired.
- n_u 1y ago
  It’s more about whether or not the company has taxable profits for that year (importantly these are not the same as real profits). I would read this article to understand more about how being forced to amortize tax deductions for expenses affects a business’s taxes. https://news.ycombinator.com/item?id=44180533 https://news.ycombinator.com/item?id=44180533 more info here too https://news.ycombinator.com/item?id=44226145 https://news.ycombinator.com/item?id=44226145
- alphazard 1y ago
  Tax deductible is a weird way of phrasing it. It's not like these software companies were counting their money at the end of the quarter, and then deciding to do R&D instead of paying taxes. They had already paid R&D expenses to build the product, which gained them revenue. Previously they weren't allowed to actualize the cost of R&D all at once, so the business could be losing money, and still have to pay taxes on top of the loss (which is nuts). This fixes the problem, so now if you spend $100 on software developers, and you make $100 from the software, then you have $0 income, instead of $80 income.
  - tomrod 1y ago
    It was also weird because people pay money on income (dividend, partner payment, SCorp share, etc.) anyway, so in a long term view this incentivized companies to keep fewer software engineers on staff.
beebmam 1y ago
There's also H-1B (and other worker visa) restrictions/costs imposed. Overall, quite good for the American tech worker
- Izikiel43 1y ago
  Source?
  - beebmam 1y ago
    Extra $250 fee for visa applications: https://judiciary.house.gov/media/press-releases/big-beautiful-border-security https://judiciary.house.gov/media/press-releases/big-beautif... 3.5% remittance fees on sending money out of the US: https://www.globalimmigrationblog.com/2025/06/what-are-the-immigration-impacts-in-budget-reconciliation-bill-h-r-1/#:~:text=status%20could%20face%20new%20financial,both%20employees%20and%20sponsoring%20employers https://www.globalimmigrationblog.com/2025/06/what-are-the-i... Also (in above source), no ACA subsidies for H-1B visa holders (and others), which likely means employers they will have to pay more for health care if they want to cover their immigrant workers
    - tareqak 1y ago
      Quoting all the fees in https://judiciary.house.gov/media/press-releases/big-beautiful-border-security https://judiciary.house.gov/media/press-releases/big-beautif... > Expansion of Immigration Fees: > $1,000 asylum application fee — first in U.S. history > $1,000 fee for individuals paroled into the U.S. > $3,500 fee for sponsors of unaccompanied children > $5,000 fee for sponsors of unaccompanied children who fail to appear in court > $550 fee for work permits > $500 application fee for Temporary Protected Status (TPS) > $400 fee to file a diversity immigrant visa application > $250 fee to register for the Diversity Visa Lottery > $250 visa integrity fee > $100 year fee while asylum applications remain pending > $100 fee for continuances granted in immigration court > $5,000 fee for individuals ordered removed in absentia > $1,500 fee to adjust status to lawful permanent resident (green card) > $1,050 fee for inadmissibility waivers > $900 fee to appeal a decision by an immigration judge > $900 fee to appeal a decision by DHS > $1,325 fee to appeal in practitioner disciplinary cases > $900 fee to file motions to reopen or reconsider > $600 application fee for suspension of deportation > $600 application fee for cancellation of removal (permanent residents) > $1,500 application fee for cancellation of removal (non-permanent residents) > $30 fee for Form I-94 (arrival/departure record), up from $6
earth2mars 1y ago
Yes, but why the domestic r&d must be amortized only within 5 years? One way it is harder for finance to deduct all the expense within 1 year or they have to amortize only within 5 years. In case of foreign r&d expenses though they cannot detect in the year they incur but they have 15 years amortize. So I don't get the benefit of. In fact if they haven't touched this it could have been much better. In tcja they made it worse. And they fix it partially by making it deductible within the year they incur for domestic r&d. But the amortization still kills it.
mischanix 1y ago
[flagged]
loeg 1y ago
You might look at the rest of the bill.

Awesome, this literally could not be better for American tech workers.

Den_VR 1y ago

So payroll for R&D is now entirely tax deductible? Businesses get to choose to pay taxes or do R&D for themselves?

lazide 1y ago
Either scenario taxes are paid - it’s just how and over what time period.
- tomrod 1y ago
  In the long run, we are all dead. 20% depreciation per year for any software developed is a burden for all but the largest of companies.
  - bobmcnamara 1y ago
    This matched capex software. Weird how the depreciation schedule changes based on how the software was acquired.
n_u 1y ago
It’s more about whether or not the company has taxable profits for that year (importantly these are not the same as real profits). I would read this article to understand more about how being forced to amortize tax deductions for expenses affects a business’s taxes. https://news.ycombinator.com/item?id=44180533 https://news.ycombinator.com/item?id=44180533 more info here too https://news.ycombinator.com/item?id=44226145 https://news.ycombinator.com/item?id=44226145
alphazard 1y ago
Tax deductible is a weird way of phrasing it. It's not like these software companies were counting their money at the end of the quarter, and then deciding to do R&D instead of paying taxes. They had already paid R&D expenses to build the product, which gained them revenue. Previously they weren't allowed to actualize the cost of R&D all at once, so the business could be losing money, and still have to pay taxes on top of the loss (which is nuts). This fixes the problem, so now if you spend $100 on software developers, and you make $100 from the software, then you have $0 income, instead of $80 income.
- tomrod 1y ago
  It was also weird because people pay money on income (dividend, partner payment, SCorp share, etc.) anyway, so in a long term view this incentivized companies to keep fewer software engineers on staff.

beebmam 1y ago

There's also H-1B (and other worker visa) restrictions/costs imposed. Overall, quite good for the American tech worker

Izikiel43 1y ago
Source?
- beebmam 1y ago
  Extra $250 fee for visa applications: https://judiciary.house.gov/media/press-releases/big-beautiful-border-security https://judiciary.house.gov/media/press-releases/big-beautif... 3.5% remittance fees on sending money out of the US: https://www.globalimmigrationblog.com/2025/06/what-are-the-immigration-impacts-in-budget-reconciliation-bill-h-r-1/#:~:text=status%20could%20face%20new%20financial,both%20employees%20and%20sponsoring%20employers https://www.globalimmigrationblog.com/2025/06/what-are-the-i... Also (in above source), no ACA subsidies for H-1B visa holders (and others), which likely means employers they will have to pay more for health care if they want to cover their immigrant workers
  - tareqak 1y ago
    Quoting all the fees in https://judiciary.house.gov/media/press-releases/big-beautiful-border-security https://judiciary.house.gov/media/press-releases/big-beautif... > Expansion of Immigration Fees: > $1,000 asylum application fee — first in U.S. history > $1,000 fee for individuals paroled into the U.S. > $3,500 fee for sponsors of unaccompanied children > $5,000 fee for sponsors of unaccompanied children who fail to appear in court > $550 fee for work permits > $500 application fee for Temporary Protected Status (TPS) > $400 fee to file a diversity immigrant visa application > $250 fee to register for the Diversity Visa Lottery > $250 visa integrity fee > $100 year fee while asylum applications remain pending > $100 fee for continuances granted in immigration court > $5,000 fee for individuals ordered removed in absentia > $1,500 fee to adjust status to lawful permanent resident (green card) > $1,050 fee for inadmissibility waivers > $900 fee to appeal a decision by an immigration judge > $900 fee to appeal a decision by DHS > $1,325 fee to appeal in practitioner disciplinary cases > $900 fee to file motions to reopen or reconsider > $600 application fee for suspension of deportation > $600 application fee for cancellation of removal (permanent residents) > $1,500 application fee for cancellation of removal (non-permanent residents) > $30 fee for Form I-94 (arrival/departure record), up from $6

earth2mars 1y ago

Yes, but why the domestic r&d must be amortized only within 5 years? One way it is harder for finance to deduct all the expense within 1 year or they have to amortize only within 5 years. In case of foreign r&d expenses though they cannot detect in the year they incur but they have 15 years amortize. So I don't get the benefit of. In fact if they haven't touched this it could have been much better. In tcja they made it worse. And they fix it partially by making it deductible within the year they incur for domestic r&d. But the amortization still kills it.

mischanix 1y ago

[flagged]

loeg 1y ago

You might look at the rest of the bill.