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gruez | on: Trump wins presidency for second time
>Gruez... Income Taxes are paid the year after they're incurred. Tax Year 2022 is filed and paid in 2023. The effects wouldn't start being felt until March 2023 at the earliest.

First off, 2022 taxes are not paid in 2023. Corporations have to pay taxes quarterly, not yearly.

https://www.irs.gov/businesses/small-businesses-self-employe...

Second, no CFO is going to going to accept "this year's engineering expenses might be 100% more expensive (because we can't deduct it), but it's only due next year so we can keep on hiring!". The whole point of accounting is modeling the company's books to reflect its financial situation as accurately as possible, not just looking at whatever the bank balance is. This includes modeling future tax obligations.

gortok | parent
Gruez. You pay payroll and estimated taxes quarterly. As long as you hit 90% of your actual tax burden, there are no penalties. You file income tax yearly and that sets you up for both your remaining burden that you didn't pay in estimated taxes, and your future estimated taxes. The trick is when you go to file by March 15th, you may or may not have accounted for all of the vagaries of tax changes -- and in fact the IRS pushes out guidance throughout the year that will affect the filing process.

For companies that were expensing 100% of developer salaries (which was a lot of them -- capitalization is very cash intensive), having to now eat 80% of that salary as profit and only being able to deduct 20% is devastating.

1171(!) small software companies have come together to try to get congress to repeal their changes to Section 174. They haven't been successful yet, but here's hoping that by further education of folks like yourself, they will be. https://ssballiance.org/