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■ R&D tax credit (Section 41). This credit remains untouched and continues to be one of the most valuable tax incentives available. Businesses involved in designing and developing new products, processes, or improving functionality, performance, and quality should take full advantage of this credit. WHAT’S NEXT? Border security is expected to play a key role in expediting the passage of this reconciliation package. The growing bipartisan urgency around this issue may serve as a catalyst for advancing the legislation. STAY UPDATED. While there are still many unknowns regarding Section 174 specifics, this unified budget bill represents a promising opportunity for meaningful tax policy reform. Businesses in design and engineering should prepare for potential changes and strategize accordingly to maximize the benefits. At CTA, we will monitor developments closely. For updates, best practices, and strategies tailored to your business, reach out to your CTA contact to schedule a conversation. Jordan Wilson is director of business development at Corporate Tax Advisors. Contact him at jordanw@corporatetaxadvisors. com . Dawson Fercho is co-founder and vice president of business development at Corporate Tax Advisors. Contact him at dawsonf@corporatetaxadvisors.com.
JORDAN WILSON & DAWSON FERCHO , from page 3
■ True fix vs. temporary relief. A permanent reversal of Section 174 amortization requirements is likely to be prioritized over a temporary “kick the can down the road” solution. “This unified budget bill represents a promising opportunity for meaningful tax policy reform. Businesses in design and engineering should prepare for potential changes and strategize accordingly to maximize the benefits.”
Retroactive application: 2022. A retroactive fix to 2022 is considered unlikely, as funds have already been spent. 2024/2025. A retroactive fix for 2024 tax year expenses is possible, though 2025 is viewed as more likely.
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■ Treatment of amortized expenses. One potential approach would involve recognizing all amortized expenses in 2025, providing a significant expense boost before reverting to standard expensing rules going forward.
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THE ZWEIG LETTER JANUARY 13, 2025, ISSUE 1568
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