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It’s Time to Track Section 174 Research and Development (R&D) Expenses – Interplay with the R&D Tax Credit

By Business Tax, Credits & Incentives, Insights, Tax Planning & Consulting

Effective for tax years beginning after December 31, 2021, the Tax Cuts and Jobs Act (“TCJA”) of 2017 changed the treatment of Internal Revenue Code (“IRC”) Section 174 costs requiring that Research and Development (R&D) costs be capitalized and amortized over a period of 5-years for domestic expenses and 15-years for offshore expenses. Although many hoped that this unfavorable provision from the TCJA would be postponed or removed prior to December 31, 2021, the change remains in effect in 2022.

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Congress Incentivizes Restaurant Purchases with Temporary 100% Deduction for Business Meals

By Business Tax, Insights, Tax Planning & Consulting

The Tax Cuts and Jobs Act (TCJA) permanently eliminated deductions for most business-related entertainment expenses paid or incurred after 2017. For example, taxpayers can no longer deduct any of the cost of taking clients out for a round of golf, to the theater or for a football game. Taxpayers responded to these changes by implementing changes to accounting systems and reimbursement policies to comply with new rules.  But the TCJA didn’t specifically address the meals, beverages and snacks that often accompany entertainment activities, leaving some taxpayers with questions.

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Legal Fees and Transaction Costs Deductions for Tax Purposes

By Business Tax, Insights, Tax Planning & Consulting

In any real estate, acquisitive or restructuring transaction, legal fees and other consultant fees can become a substantial cost during the deal. IRS regulations outline several limitations on deductibility, so it is important to understand these limits and potential exceptions to capitalization to maximize the “after-tax” dollars spent on legal fees and other transaction costs.

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