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If you’ve ever spent time or money improving a product, creating custom software, testing new systems, or making your operations more efficient — this new tax rule directly benefits YOU.
What Changed in 2025?
The new federal tax legislation officially repealed the R&D amortization rule, and starting January 1, 2025, you can fully deduct qualifying research and development (R&D) expenses in the same year they’re incurred.
- No more spreading deductions over 5 years.
- No more compliance headaches.
- More money stays in your business — when you need it most.
This change makes it easier and faster for growing companies to recover costs and reinvest in innovation.
What Counts as R&D?
Even if you don’t wear a lab coat or run a tech startup, R&D might still apply to you:
- Developing or testing new products
- Customizing software or tools
- Improving manufacturing processes
- Streamlining internal systems
- Experimenting with AI or automation
If your business is solving problems or doing things in new ways, you might be leaving valuable tax dollars on the table.
What Should You Do Now?
- Review any 2024–2025 projects that involved trial-and-error, experimentation, or system building.
- Work with your accountant to identify qualifying R&D costs (wages, supplies, contractor fees, etc.).
- Ask if your business qualifies for both the deduction and the R&D credit. Many small businesses now do!
- Consider amending prior year returns if you were impacted by amortization rules in 2022–2024.
Need help evaluating whether your company qualifies?
Send us a DM or comment “R&D Credit” and we’ll schedule a free call to discover your potential tax savings.
