R&D Full Expensing Savings
Compare Section 174 amortization against the new 2026 rules. Identify immediate tax liability reduction for your small business.
Financial Inputs
Tax Strategy Insight
2026 Full Expensing allows for a 100% deduction of domestic R&D costs in the first year, significantly boosting immediate cash flow for startups.
Estimated Year 1 Tax Savings
Immediate Cash Flow Increase
Old Amortization Rule
Year 1 Deduction (Section 174)
2026 Full Expensing
Year 1 Deduction (100%)
Deduction Advantage
New rule increases deduction by 90% in Year 1
Additional Deduction
Why the 2026 R&D Rule Matters
Section 174 2026 Updates
Since 2022, businesses were forced to amortize domestic R&D over 5 years. The 2026 update restores 100% bonus depreciation for these costs, allowing for immediate expense recognition.
Eligibility Requirements
To qualify for full expensing, R&D must be performed in the U.S. and relate to the development of a new or improved product, process, or software.