Section 174 New Requirements and Its Impact on Technology Companies

On the surface, it may seem like a simple accounting method change, but Section 174: Amortization of Research & Experimental Expenditures has complex implications and rules, particularly for technology companies, as it relates to research and software development costs.

Section 174 impacts technology companies much more than other industries. In the latest episode of our Technology podcast, Tim Larson, Tax Partner, welcomes members from Cherry Bekaert’s Tax Credits & Incentives Advisory practice, Martin Karamon, Daniel Mennel and Carolyn Smith Driscoll, to discuss new mandatory requirements for taxpayers under Section 174 and what it means for technology companies.

In this podcast, we’ll cover: 

  • 1:28 – Background and overview of the rules surrounding Section 174
  • 3:34 – Differences between the R&D credit and Section 174
  • 7:06 – Companies in Losses
  • 8:47 – Methodologies to consider for allocation of overhead
  • 10:22 – Software Development vs. Services

Future developments to this tax code are anticipated this year. Subscribe to Cherry Bekaert’s technology podcast and other guidance offerings so you don’t miss a thing.

Other Relevant Insights:


View All Technology Podcasts

 

Martin Karamon

Tax Credits & Incentives Advisory Leader

Partner, Cherry Bekaert Advisory LLC

Carolyn Smith Driscoll

Tax Credits & Incentives Advisory

Director, Cherry Bekaert Advisory LLC

Timothy R. Larson

Tax Services

Partner, Cherry Bekaert Advisory LLC

Past Episodes

Podcast

November 11, 2024

20:43

Speakers: Sarah McGregor, Brooks E. Nelson, Mark Giallonardo

Learn how to claim disaster losses and defer casualty gains under IRS rules. Explore relief measures for individuals and businesses affected by disasters.

Podcast

November 8, 2024

26:55

Speakers: Kurt Manske, Marc Montoro

Dive into the HITRUST framework, exploring its certifications, benefits, and why it's essential for achieving industry compliance and strong security.

Podcast

November 7, 2024

22:13

Speakers: Brooks E. Nelson, Sarah McGregor, Martin Karamon

Learn about the ERC's voluntary disclosure program, IRS moratorium, and how employers can navigate claim eligibility and refund processing changes.