[lkesteloot]

The title is about R&D, but because of Section 174 changes, this applies to all software development, whether "research" or not. If you're making a dumb app, you can't deduct the expenses (including salaries), you have to capitalize them. It's brutal for a small company.

[walterbell]

In 2022, U.S. tax law kept LLMs (OpEx) deductible and made engineer salary (now CapEx) amortizable over 5 years.

In 2027, human and LLM net expenses will be equivalent again, on a 5y rolling deduction basis. Robots remain CapEx.

Previous discussion: https://hn.algolia.com/?query=section%20174

[thayne]

Not just small companies. Those changes are almost certainly a contributing factor to the massive layoffs among tech companies.

[kgwgk]

> The title is about R&D, but […] applies to […] development, […] "research" or not.

In R&D there are R and D.