The following article, The must-know accounting methods for 2022 (and after), originally appeared in the May 2023 issue of The Tax Adviser.
As amended by the Tax Cuts and Jobs Act, Section 174 of the Internal Revenue Code now requires taxpayers to capitalize specified research or experimental expenditures paid or incurred for tax years starting after December 31, 2021, and amortize those amounts over either five or 15 years (depending on whether the activities were performed in or outside the United States), applying the midpoint convention.
This article highlights five topics related to accounting methods to help taxpayers and practitioners comply with law changes, streamline onerous compliance processes, and minimize tax liabilities:
- Sec. 174 research or experimental expenditures
- Accounting method changes for controlled foreign corporations
- Historic absorption ratio election
- Inflation amounts for the small business taxpayer threshold
- Tangible property regulations
These highlights can be found in BDO’s Cindy Houser’s article in The Tax Adviser.