The Founder’s Guide to the One Big, Beautiful Bill
Early this month, in July 2025, Congress dropped the One Big, Beautiful Bill (OBBB)—and if your startup touches R&D, it just changed your tax game in a big way. We're talking updated rules for Sections 174 and 41 that can unlock real cash, refunds, and strategic plays.
If you’ve been burned by amortization rules or told the R&D tax credit “wasn’t worth it,” this is your cue to get back in the game.
What Just Changed
1. Immediate expensing for U.S.-based R&D is back
Under the 2017 tax law, you had to amortize your R&D spending over five years. The OBBB flips that. Starting January 1, 2025, you can deduct it all immediately.
2. Retroactive relief for 2022–2024
If your startup brought in ≤ $31M in average receipts (2022–24), you can amend past returns and retroactively expense R&D. That means potential cash refunds from the IRS. Free money if you play it right.
3. Catch-up option for everyone else
Even if you’re over the $31M line, you can deduct the remaining capitalized R&D from 2022–24 either in 2025 or spread it across 2025–2026.
4. Foreign R&D still stuck
R&D done outside the U.S.? Sorry—still stuck with 15-year amortization. No change there.
5. New coordination with R&D tax credit
Starting in 2025, when you take the R&D tax credit, you’ll reduce your deduction by that credit amount—but that’s it. You still get the deduction and the credit. Just cleaner math.
Important: You’ve got one year from the bill’s enactment—July 2026—to make this retroactive election. Miss that window, and you leave money on the table.
Let’s Talk Real Dollars: Before vs. After Example
Here’s what this means, with numbers founders can actually relate to.
Before OBBB (Old Rules)
Say your startup spent $500K on qualifying U.S. R&D in 2023.
You had to capitalize it and deduct $100K/year over 5 years.
You could still claim a $50K R&D tax credit, but you'd have to reduce your deductions accordingly.
Your cash flow? Weak sauce—you get crumbs now, and the rest over half a decade.
After OBBB (New Rules)
Same startup. Same $500K in R&D—but now it’s 2025.
You deduct the full $500K immediately.
You still claim the $50K R&D tax credit (adjusting the deduction slightly).
If you're ≤ $31M in revenue, you can go back and do this for 2022–24 and get real cash refunds.
Bottom line? The IRS finally decided to stop playing games with your cash. You get a deduction and a credit, now—not in five years.
What Founders Should Do Next
Call a real tax accountant
Not your uncle who files W‑2s in February. You need someone who understands tax accounting, R&D tax credit strategy, and startup equity rules.Check your receipts
If you pulled in under $31M (on average) from 2022–24, congrats—you’re in the refund zone. Amend those old returns.Run scenarios
Would it help to deduct all remaining amortized R&D in 2025? Or spread it? Model it out and plan your tax moves like you plan your next funding round.Rethink your R&D tax credit
If you skipped it before because of amortization headaches—go back. It’s back on the table and worth real money now.
OK. But What About Larger Startups?
If you’re above the $31M threshold, you can’t go back and amend past returns. But you can still:
Accelerate the remaining unamortized deductions from 2022–2024—take it all in 2025, or spread it over 2025–2026.
Review your R&D expense schedules and update your tax projections now.
Ensure compliance if you didn’t amortize in the past (the IRS will be watching)
TL;DR Playbook
Scenario 1: ≤ $31M receipts (2022–24)
What You Can Do: Amend 2022–24 returns → full expensing + refunds + R&D credit
Scenario 2: > $31M receipts
What You Can Do: Deduct remaining capitalized R&D in 2025 or split 2025–26
Scenario 3: U.S.-based R&D (2025+)
What You Can Do: Deduct immediately + claim R&D tax credit
Scenario 4: Foreign R&D
What You Can Do: Still amortized over 15 years. Plan for the long game
Final Word from Ursa
If you’re doing innovation and you’ve been ignoring the R&D tax credit, you’ve been leaving money on the table. The One Big, Beautiful Bill just fixed that.
This is the time to:
Clean up your tax strategy
Claim what’s yours
Build better runway with smarter accounting
And if you need someone who can actually walk you through it—not lecture you with IRS code citations—Ursa’s your guy. Book a strategy call now!