IIUC, whereas previously companies could deduct salaries in year Y from revenue in that same year Y, now section 174 allows deduction of only 1/5 of those salaries in each of the 5 years [Y,Y+1,Y+2,Y+3,Y+4].
After 5 years of this law being in effect, will the numbers balance back out to pre section 174? That is, does that deduction from year Y carry over into year Y+1, Y+2, etc.?
I mean, this probably still matters a lot for startups given their shorter lifetimes, but it seems any large company(I'm thinking of, e.g. Apple, who has plenty of cash on hand) that's been around for a while could just wait it out? I am not familiar with corporate tax law and how deals are structured, but could you also defer revenue in the same way to offset(e.g. customers with a 5 year contract paying progressively more but keeping the same total $ amount to sync with your deductions)?
This is for specific R&D costs, like doing something patentable. Most developers are not doing R&D.
Most developers are fixing bugs, helping sales, keeping systems online, keeping up to date on patches, performing security scans, complying to some internal policies.
> (3)Software development
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.
