174A Expensing
The One Big Beautiful Bill Act permanently restored full, immediate expensing of domestic R&D costs under new Section 174A. If your business spends on research and development, you can now deduct 100% of those costs in the year they're incurred — no more spreading deductions over five years.
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For three years, businesses were forced to capitalize domestic R&D expenses and deduct them over a 5-year period — a rule that quietly increased tax bills and created real cash flow problems for companies investing in innovation. The One Big Beautiful Bill Act changed that permanently.
Under new Section 174A, any domestic research or experimental expenditure you incur in tax years beginning after December 31, 2024 is fully deductible in the same year. Whether you spend $50,000 or $5 million on qualifying R&D, the full amount reduces your taxable income immediately — at the 21% corporate rate, every $1M in qualifying spend translates to $210,000 in immediate tax savings.
Our team identifies every qualifying expense, ensures your documentation meets IRS standards, and maximizes the deduction across your full R&D footprint. And because the 174A deduction and the Section 41 R&D Tax Credit can be claimed together, we always evaluate both to deliver the highest combined benefit.
