The House just passed the One Big Beautiful Bill for America (OBBBA), and one of the most founder-friendly changes tucked into it is this: startups can once again expense domestic R&D costs immediately, rather than amortizing them over five years. If you’re spending money on engineers, product dev, or technical problem-solving - this matters.

Table of Contents

• Quick Recap: What Changed with Section 174?

• Why This Matters for Haven Customers

  
  

💡 Quick Recap: What Changed with Section 174?

Starting in 2022, a tax rule change required businesses to amortize U.S. based R&D expenses over 5 years (or 15 years for foreign research). For startups, that meant higher taxable income on paper and bigger tax bills just for investing in growth.

Now, OBBBA reinstates immediate expensing for domestic R&D costs for 2025 through 2029. Even better, the Senate version of the bill would make this permanent and allow companies to retroactively deduct domestic R&D costs from 2022–2024.

Here’s a real-life example:

Prior to the recent changes, if you incurred $100,000 in domestic R&D expenses, you were required to amortize those costs over five years—recognizing only $20,000 per year. This meant that even if your company operated at a loss, you could still owe taxes because the remaining $80,000 of expenses had to be deferred.

Under the new BBB changes to Section 174, you can now fully deduct the entire $100,000 of R&D expenses in the year they’re incurred—significantly improving cash flow and reducing your immediate tax burden.

“The TLDR is that starting in tax years that begin after 12/31/2024 ALL taxpayers can now fully deduct any unamortized domestic Section 174 SRE. And small businesses can make an election within the next year to go back and amend prior years (2022 - 2024) to unwind all domestic SRE capitalization and claim a refund (if the change would result in a refund)”

Matt Roberts - R&D tax credit master

🚀 Why This Matters for Haven Customers

If you’re a high-growth startup spending on:

* Developer salaries

* Technical prototyping

* Cloud costs tied to experimentation

…then Section 174 likely affects you. And under the new rules, you can:

* Expense those costs in the current year

* Potentially amend prior tax returns (2022–2024) to reduce prior-year taxable income

* Pair deductions with the federal R&D credit (Section 41) for even bigger benefit

🧾 TLDR

• You can now expense domestic R&D immediately again (2025–2029)

• Retroactive relief for 2022–2024 is likely if the Senate version passes

• R&D tax credits still apply and are easier to layer on

• Foreign R&D still must be amortized