| There's been a lot of debate around Amazon's hiring practices, particularly given the conflicting data and statements from the company. A core issue seems to be that Amazon has alienated a significant portion of its domestic engineering talent pool. Many experienced engineers have left, and others seem unwilling to return, even when offered higher-level roles. I personally was an L7 engineer and turned down a boomerang offer. In response, Amazon appears to be increasingly turning to H-1B workers - especially from countries where the company’s reputation hasn't soured as much. Example: https://h1bgrader.com/h1b-sponsors/amazon-dot-com-services-l... While these engineers may be less experienced, they're often more willing to accept lower compensation, due in part to discrepancies in wage data reported by the Department of Labor. For example, the BLS wage data, which sets a $115k cap for certain wage codes, has led to a misalignment in what’s considered a "fair wage" enabling companies like Amazon to pay these workers below actual market rates. This reliance on overseas talent seems to be more than just a cost-saving measure; it also reflects Amazon's ongoing struggle with high turnover among its U.S. engineering staff. The company’s well-documented high attrition rates, as highlighted in reports like this one from Forbes - https://www.forbes.com/sites/edwardsegal/2022/10/24/amazon-r... - shed light on the challenges Amazon faces in retaining domestic engineers. The LinkedIn data also supports this trend. Candidly, it seems that Amazon has burned too many bridges with U.S.-based engineers, forcing the company to increasingly rely on a less experienced labor pool from abroad in order to maintain its operations, despite being an American based, publicly traded company. |
What significant changes to section 174 were made in the big beautiful bill?
Key Changes The bill created a new Section 174A that restores immediate deductibility for domestic research and experimental (R&E) expenditures, largely reversing the Tax Cuts and Jobs Act requirement that had forced companies to capitalize and amortize all R&E expenses starting in 2022.
Domestic vs. Foreign Treatment:
Starting with tax years beginning after December 31, 2024, businesses may immediately deduct domestic R&E expenditures in the year they are paid or incurred
Foreign R&E expenditures must continue to be capitalized and amortized over 15 years under the original Section 174
Retroactive Relief Options:
The new rules permit taxpayers to deduct previously capitalized and unamortized domestic R&E expenditures over a one- or two-year period, and small businesses may opt to apply new Section 174A going back to 2022 and file amended returns. Eligible small business taxpayers (generally those with average annual gross receipts during the preceding three years not exceeding $31 million) can retroactively expense R&E expenditures for taxable years beginning after December 31, 2021, by filing amended returns.
Alternative Treatment: Taxpayers may still elect to capitalize and amortize domestic R&E expenditures over a period of not less than 60 months, or elect to amortize them over a 10-year period.
This represents a major win for businesses conducting research and development, as the 2022-2024 capitalization requirement had created significant tax burdens and compliance complexity.