Accountants Seek Small Company Guidance to Clarify R&D Tax Break

The Treasury Department and the IRS should issue guidance to clarify an aspect of a new tax break on research and development costs aimed at helping small businesses, an accountants’ group said.

Guidance is needed to make clear that eligible small businesses can immediately deduct domestic R&D costs on their 2024 tax returns, rather than first having to capitalize those costs and later amend their returns to take the deduction, the American Institute of CPAs said in a comment letter. The letter was sent last Thursday and released publicly Tuesday.

The new tax-and-spending law enacted in July allows taxpayers to ...