Federal Tax, Tax

Changes Due to the Tax Relief for American Families and Workers Act

The Tax Relief for American Families and Workers Act, which was approved by the U.S. House Ways and Means Committee, makes changes to the current tax treatment of research and development (R&D) expenditures. Right now, a business must amortize such costs after Dec. 31, 2021, over a five-year period. Previously, they could be deducted in the year in which they were incurred or paid. The cost of research conducted outside the U.S. must be deducted over a 15-year period. Under the proposed law, businesses could currently deduct domestic R&D costs through Dec. 31, 2025. However, the bill doesn’t change the rules for foreign research. Stay tuned as we track the progress of the bill. Contact us with questions © 2024