R & D Cost Capitalization and Implications
Tuesday, March 14, 2023
10:30 AM - 12:00 PM
Webinar
To the dismay of taxpayers and practitioners, the requirement to capitalize research and experimental (R&E) expenses under Internal Revenue Code Section 174 was not deferred in a 2022 year-end tax bill as many expected, adding more confusion and uncertainty to an already tricky situation.
Despite strong support in Congress to fix the Section 174 law change — and a vocal lobbying effort from industry groups — Congress could not come together to address this pressing issue. Even more worrisome is the fact the new divided Congress appears to be in no hurry to take up tax matters.
With billions in additional tax expense at stake, this law change has far-reaching implications for U.S. businesses and innovation.
Key insights
Capitalization of research and experimental costs under Section 174 could be here to stay since Congress could not agree on a legislative fix.
- Companies large and small will feel the impacts of smaller deductions and increased taxable income.
- The IRS has issued guidance instructing taxpayers how to report and implement this change beginning with tax year 2022.
- Evaluate how this law change will impact your tax and financial reporting positions.
Speaker
Ginny Veit, Principal, CliftonLarsonAllen, LLP
Ginny has over 20 years experience in accounting with a broad-based background in taxation with 11 years in the defense industry. Ginny specializes in Research & Development Tax Credit as a member of CLA's National Federal Tax Strategies Team. She has broad experience in manufacturing and software development clients. She is passionate about helping clients and making connections.
Moderator
Maria Morales, Audit Principal, CliftonLarsonAllen, LLP
Maria E. Morales, CPA, is an audit principal in the Tampa office of CliftonLarsonAllen, LLP (CLA) with a primary focus on manufacturing and distribution (M&D) engagements and is the Florida M&D industry lead. Additionally, she serves as the primary engagement leader for stand-alone IFRS attest engagements for the Firm and is a part of the global leadership team. Maria has more than 25 years of accounting experience. Prior to her more than 20 years of working in public accounting, she worked in private accounting as an Assistant Controller for a privately held aeronautical company. Maria began her career in public accounting at a Top Five public accounting firm. She has served on various female initiative committees that focused on the advancement, retention, and empowerment of female professionals. Maria also has dedicated a significant amount of time to coaching and mentoring young professionals. Maria currently serves on the Executive Board of GrowFL.
Open Q&A
