Hello Patricia,
I forgot to mention that these Section 174 Costs, and the amortization thereof, represent Schedule M-1 book to tax differences. For many or most small to medium size companies they may not have been amortized on the books but for tax purposes they must now be capitalized resulting in a significant increase to taxable income net of the first year 10% amortization tax deduction (i.e. a net increase to taxable income of 90% of the 2022 research costs). The tax laws require this adjustment starting in 2022, it's not optional. The required election statement under Rev Proc. 2023-8 allows taxpayers to avoid the further pain of having to file a complicated Form 3115 although they still have to record the very costly increase to taxable income.
