The One Big Beautiful Bill Act's Section 174A restores immediate domestic R&D expensing starting in 2025, and small businesses under roughly $31 million in average gross receipts have until July 6, 2026 to amend 2022, 2023, and 2024 returns to recover taxes paid under the TCJA capitalization rules.
ASC 350-40 governs which software development costs SaaS companies expense and which they capitalize as intangible assets. ASU 2025-06 retires the three-stage model in favor of a probable-to-complete threshold, with the FASB signaling more costs will be expensed. This guide covers what qualifies, the EBITDA and balance-sheet impact, and how to set up an audit-defensible process.
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