More about Michael DePrima
Blog Posts by Michael DePrima:
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Tech companies should plan now for Section 174 capitalization for tax year 2023 and beyond
Will it get fixed? This time last year there was optimism that a 2022 year-end fix would be passed by Congress and Section 174 research capitalization would be deferred or eliminated altogether. Instead, Congress failed to act and tax year 2022 proved to be one of the most challenging for taxpayers subject to Section 174. […]
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R&D payroll tax credit increases for 2023
By Ginny Veit Companies performing research and development (R&D) activities in 2023 can take advantage of a supercharged R&D tax credit against their payroll taxes. The payroll credit can be a hugely valuable cash flow tool for early stage tech companies that should be part of your year-end planning discussions. The payroll tax election under […]
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IRS releases new Section 174 research capitalization guidance
IRS recently announced that proposed regulations are forthcoming under Section 174 while also providing interim guidance. Check out our latest article to see what this development means for tech companies: IRS to Propose Section 174 Regulations, Interim Guidance Issued : 2023 : Articles : Resources : CLA (CliftonLarsonAllen) (claconnect.com).
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Uncertainty in the new world of section 174 capitalization
Check out our latest update on research expense capitalization under Internal Revenue Code section 174. Topics include the legislative state of play, confusion over the technical application of section 174, and whether companies should extend their 2022 tax returns. https://www.claconnect.com/en/resources/articles/2023/section-174-capitalization-uncertainty-answers-to-top-faqs
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IRS Issues §174 Capitalization Guidance
On December 12, the IRS issued Revenue Procedure 2023-8 setting forth guidance for taxpayers making accounting method changes under the new §174 capitalization rules that went into effect on January 1, 2022. The guidance comes at a time when taxpayers and practitioners are still hopeful that the capitalization requirement will be deferred or eliminated by […]
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Section 280G and Parachute Payments: The Distraction In Your M&A Deal
Tech companies and their executives are often subject to IRC Section 280G when undergoing a change in control. Check out our recent article providing a basic framework for understanding how Section 280G applies in a transaction and how it can be addressed: Section 280G and Parachute Payments: The Distraction In Your M&A Deal : 2022 […]
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While we wait for a Section 174 fix, software companies may feel the largest impacts
Taxpayers and practitioners had hoped that a “fix” under Section 174 would have been addressed by Congress already. With the first quarter of 2022 behind us, however, we still have no legislation in place that would defer or eliminate the amortization requirement that went into effect for tax years beginning after December 31, 2021. This […]
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Uncertainty Continues for Section 174 Expensing
With the Build Back Better Act (BBBA) being all but dead in the Senate after Joe Manchin’s unexpected rejection of the bill, concerns remain high regarding the future of Section 174 of the Internal Revenue Code. Section 174 allows taxpayers to currently deduct research and experimental (R&E) expenditures, rather than having to capitalize and amortize […]