Technology companies investing in software development for internal or external use face a variety of accounting and tax rules for research and development (R&D) expenditures. In addition, confusing tax regulations make it difficult to properly claim the tax benefits from these investments. This challenge arises from overlapping and sometimes contradictory tax rules and accounting guidelines.While many taxpayers are comfortable with the Generally Accepted Accounting Principles (GAAP) guidelines, the tax rules of IRC Section 174 capitalization and IRC Section 41 R&D tax credits are more nuanced, requiring costs to be categorized differently. During this webinar, our specialists will help you understand the three primary avenues to approaching R&D expenditures.
Learning objectives:
- Understand the financial reporting guidelines for software development under GAAP and overlap with tax requirements.
- Differentiate between the treatment of R&D expenditures under IRC Section 174 amortization of research and experimental expenditures and IRC Section 41 Credit for increasing research activities.
- Apply tax rules to categorize software development R&D costs accurately and maximize potential R&D tax credit incentives.
