Trump’s Proposed Tax Changes: What They Mean for R&D Tax Credits

Revamping R&D Tax Treatment

Trump’s proposed change to R&D expense treatment. The current requirement to capitalize and amortize R&D expenditures has burdened many innovative businesses. The Trump administration’s proposal to return to immediate expensing of R&D costs could provide substantial benefits for companies investing in innovation.

Key impacts of the proposed R&D changes:

• Elimination of the current 5-year domestic/15-year foreign research amortization requirement
• Return to immediate expensing of R&D costs
• Improved cash flow for research-intensive businesses
• Potential increase in domestic R&D investment

This proposal, supported by bipartisan legislation, could significantly enhance the value of R&D tax credits and encourage increased investment in domestic research and development.

Strategic Planning Considerations

As these potential changes develop, businesses should consider:

1. Timing of capital investments
2. Assessment of R&D activities and documentation
3. Consultation with tax specialists to maximize benefits

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