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Can solar and wind power Britain? An update of David MacKay's numbers

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Tell HN: Submit comments to IRS re tax treatment of software dev expenses

Public comments can be submitted regarding IRS Notice 2023-63 "Guidance on Amortization of Specified Research or Experimental Expenditures under Section 174," here: <a href="https://www.regulations.gov/document/IRS-2023-0040-0003/comment" rel="nofollow noreferrer">https://www.regulations.gov/document/IRS-2023-0040-0003/comm...</a><p>The guidance in question can be found here: <a href="https://www.irs.gov/pub/irs-drop/n-23-63.pdf" rel="nofollow noreferrer">https://www.irs.gov/pub/irs-drop/n-23-63.pdf</a><p>There was previous discussion of these rules on HN here: <a href="https://news.ycombinator.com/item?id=35614313">https://news.ycombinator.com/item?id=35614313</a><p>To very briefly summarize, these rules force certain research expenses to be treated under Section 174 and thus capitalized and amortized over a period of 5 years, instead of under Section 162 (ordinary and necessary business expenses) which are immediately deducted in the year they occur.<p>Part of the issue is the extremely broad classification of "research expenses". Notably, it classifies virtually all software development as research, as well as the proportional share of all overhead/fringe expenses. It also changes the treatment of contracted research activities (note that includes software). This has a hugely negative impact for early-stage startups, contract research firms (i.e. SBIR companies), and independent software developers.<p>To construct a basic example:<p><pre><code> Revenue: $100k Expenses: $100k (developer salaries) Net operating income: $0 Taxable income: $100k - 0.1x100k = $90k (first year deduction is 10% of SREs) </code></pre> Come tax time, you now owe the government $18-30k taxes on your $0 real income.

Tell HN: Submit comments to IRS re tax treatment of software dev expenses

Public comments can be submitted regarding IRS Notice 2023-63 "Guidance on Amortization of Specified Research or Experimental Expenditures under Section 174," here: <a href="https://www.regulations.gov/document/IRS-2023-0040-0003/comment" rel="nofollow noreferrer">https://www.regulations.gov/document/IRS-2023-0040-0003/comm...</a><p>The guidance in question can be found here: <a href="https://www.irs.gov/pub/irs-drop/n-23-63.pdf" rel="nofollow noreferrer">https://www.irs.gov/pub/irs-drop/n-23-63.pdf</a><p>There was previous discussion of these rules on HN here: <a href="https://news.ycombinator.com/item?id=35614313">https://news.ycombinator.com/item?id=35614313</a><p>To very briefly summarize, these rules force certain research expenses to be treated under Section 174 and thus capitalized and amortized over a period of 5 years, instead of under Section 162 (ordinary and necessary business expenses) which are immediately deducted in the year they occur.<p>Part of the issue is the extremely broad classification of "research expenses". Notably, it classifies virtually all software development as research, as well as the proportional share of all overhead/fringe expenses. It also changes the treatment of contracted research activities (note that includes software). This has a hugely negative impact for early-stage startups, contract research firms (i.e. SBIR companies), and independent software developers.<p>To construct a basic example:<p><pre><code> Revenue: $100k Expenses: $100k (developer salaries) Net operating income: $0 Taxable income: $100k - 0.1x100k = $90k (first year deduction is 10% of SREs) </code></pre> Come tax time, you now owe the government $18-30k taxes on your $0 real income.

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