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- The Crisis: Despite promises of reform, the 2026 tax cycle still requires software development costs to be amortized over 5 years (15 years for foreign dev), creating “Phantom Income” where LLCs owe taxes on money they have already spent.
- The Strategy: Leveraging the Working Families Tax Cuts and the new Section 174A Domestic Expensing rules to offset the amortization burden.
- The Shark Insight: “Software development is a tax trap in 2026 if you outsource overseas. By moving your dev team back to the U.S., you shift from 15-year amortization to immediate domestic expensing. It’s not just a ‘patriotic’ move; it’s a 30% cash-flow play for your Q2 estimated payments.”
