https://www.wsj.com/articles/small-businesses-face-big-tax-bills-from-research-deduction-change-a189b113
Westminster Tool, which employs 35 full-time workers in Plainfield, Conn., faces a 171% tax rate for 2022 due to a change in the way research expenses are deducted.
A piece of the 2017 tax law is leaving small, research-intensive firms with IRS bills they can’t pay
Westminster Tool, which employs 35 full-time workers in Plainfield, Conn., faces a 171% tax rate for 2022 due to a change in the way research expenses are deducted.
By
| Photographs by Christopher Capozziello for The Wall Street Journal
March 17, 2023 7:00 am ET
Laura Lynn Gonzalez expected a tax refund this year, after her two-employee data-visualization company experienced a $30,000 loss. Instead, she said, she is facing a $100,000 federal tax bill that is about as large as her 2022 salary.
Ms. Gonzalez’s predicament stems from a piece of the 2017 tax law that is taking effect now. It requires companies to spread deductions for research costs over five years instead of taking them immediately.
Resume Subscription
We are delighted that you’d like to resume your subscription.
You will be charged $ + tax (if applicable) for The Wall Street Journal. You may change your billing preferences at any time in the Customer Center or call Customer Service. You will be notified in advance of any changes in rate or terms. You may cancel your subscription at anytime by calling Customer Service.
Please click confirm to resume now.
Ms. Gonzalez’s predicament stems from a piece of the 2017 tax law that is taking effect now. It requires companies to spread deductions for research costs over five years instead of taking them immediately.