IANAA, but very important to remember that:
1) R&D classification of a single employee should be a percentage. Accountants don't list employees one by one on a tax return, they're grouped together and a percentage of their wages can be allocated to different functions of a business outside of R&D.
2) A lot of things do not qualify as "R&D". For example...
- Fixing bugs
- Maintaining existing features
- Improving existing features (even enhancing functionality)
- Building a feature because sales promised it to a customer
- Refactoring code
- Anything related to devops/infrastructure, upgrading servers, updating dependencies
- Anything related to customer support, onboarding or retention
- Anything related to helping Sales/Marketing close new business or get more leads
- Anything related to supporting day-to-day business operations
I'm not an expert, but I think it will be relatively easy for accountants to do some magic behind the scenes by classifying only a small percent of wages toward R&D.
I think the average engineer spends less than 20% of their time on "true" R&D, and if that's the case, 80% of wages can be deducted as an expense without amortizing.
1) R&D classification of a single employee should be a percentage. Accountants don't list employees one by one on a tax return, they're grouped together and a percentage of their wages can be allocated to different functions of a business outside of R&D.
2) A lot of things do not qualify as "R&D". For example...
- Fixing bugs
- Maintaining existing features
- Improving existing features (even enhancing functionality)
- Building a feature because sales promised it to a customer
- Refactoring code
- Anything related to devops/infrastructure, upgrading servers, updating dependencies
- Anything related to customer support, onboarding or retention
- Anything related to helping Sales/Marketing close new business or get more leads
- Anything related to supporting day-to-day business operations
I'm not an expert, but I think it will be relatively easy for accountants to do some magic behind the scenes by classifying only a small percent of wages toward R&D.
I think the average engineer spends less than 20% of their time on "true" R&D, and if that's the case, 80% of wages can be deducted as an expense without amortizing.