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We are excited to share insights, updates, and valuable information related to changes in the credits and incentives available for tax year 2023. Stay tuned for the latest updates and let’s make 2024 a year of breakthroughs together. 

The Tax Relief for American Families and Workers Act of 2024 has been making waves since its passage in the House on January 31st. However, as the first major tax deadline of the year looms closer, the Senate is yet to convene to discuss this crucial bill. Among its various provisions aimed at providing tax relief for working families and businesses, one aspect that demands attention is the update regarding Section 174 amortization.

What exactly does this mean for businesses, and how should they prepare? Let’s delve into the details.

 Understanding the 174 Amortization Update

Section 174 of the tax code deals with the treatment of research and experimental expenses. Currently, certain expenses falling under this category require amortization, spreading the cost over multiple years rather than allowing for immediate deduction. The Tax Relief for American Families and Workers Act of 2024 proposes changes to this, potentially impacting how businesses handle these expenses.

Key Provisions of the Bill

While the bill awaits Senate consideration, it’s essential to note some of its significant provisions:

  1.  Increase in Child Tax Credit: Families could see an increase in the child tax credit, providing much-needed relief for households with children.
  2. Expansion of Earned Income Tax Credit (EITC): The bill aims to broaden the eligibility and increase the benefits of the EITC, offering additional support to low and moderate-income workers.
  3. Deduction for Childcare Expenses: Recognizing the financial strain of childcare, the bill proposes a deduction for these expenses, easing the burden on working parents.
  4.  Tax Incentives for Businesses: Alongside relief for families, the bill includes provisions benefiting businesses, such as deductions for research and development expenditures and an extension of the depreciation deduction.

What Businesses Need to Do

For businesses navigating the complexities of tax compliance, it’s crucial to stay informed and prepared. With potential changes to Section 174 looming, understanding which expenses may require amortization and how this impacts financial planning is paramount.

Join Our Section 174 Webinar

To equip our clients with the knowledge and resources needed to navigate these changes effectively, EPSA USA is hosting a Section 174 webinar on Wednesday, February 28th at 1:00pm EST. During this session, attendees will gain insights into expenses requiring amortization, potential implications of the bill’s passage, and how EPSA USA can provide support and guidance to ensure compliance and maximize benefits.

As the Tax Relief for American Families and Workers Act of 2024 awaits Senate review, businesses must stay proactive in understanding its potential implications, particularly concerning Section 174 amortization. By staying informed and leveraging resources such as our upcoming webinar, businesses can navigate these changes with confidence, ensuring compliance and optimizing their financial strategies in the face of evolving tax legislation.