As the nation’s leading provider of engineering-based cost segregation studies and R&D tax credit services, CSSI is closely monitoring potential changes to business tax policy. Two key areas of focus under the proposed Trump administration policies could significantly impact how businesses handle depreciation and research expenses.
The Return of 100% Bonus Depreciation
The current phase-out of bonus depreciation has been a growing concern for many business owners. Under existing law, the 100% immediate expensing benefit is being reduced by 20% each year until its complete elimination in 2027. However, proposed changes under the Trump administration could reverse this trend, offering significant opportunities for property owners and businesses.
What this means for businesses:
- Immediate expensing of the full cost of qualifying property
- Enhanced cash flow benefits in the year of purchase
- Greater flexibility in investment planning
- Potential for increased capital investments
For commercial property owners, this change could make cost segregation studies even more valuable. By identifying building components eligible for accelerated depreciation, owners could maximize the benefits of restored 100% bonus depreciation.
Revamping R&D Tax Treatment
Perhaps equally significant is the proposed change to R&D expense treatment. The current requirement to capitalize and amortize R&D expenditures has been a burden for 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:
- Timing of capital investments
- Evaluation of current depreciation strategies
- Assessment of R&D activities and documentation
- Consultation with tax specialists to maximize benefits
Looking Ahead
While these proposals are still pending implementation, working with experienced specialists like CSSI can help ensure your business is positioned to take full advantage of any tax policy changes. Our expertise in both cost segregation and R&D tax credits makes us uniquely qualified to help businesses navigate these potential changes.
With over 45,000 completed studies nationwide, CSSI stands ready to help you optimize your tax strategy under current and future tax policies. Contact us to learn how these proposed changes could benefit your business.