Research and Experimentation Amortization and Expense
Entrepreneurs who set out to create new products or improve existing products are generally able to deduct the costs they incur carrying out research and experimentation activities. You can choose to deduct certain research and experimentation costs in the year you incur them, or amortize the costs over five or ten years. Qualifying research and experimentation costs can be deducted on various lines of your Schedule C depending on how you elect to treat them (deduct in current year or amortize). The research and experimentation deduction can give entrepreneurs a significant tax break, however, it is a complicated topic so be sure to consult with your tax advisor to determine how you should treat your specific research and experimentation costs.